Dow Closes Near Record High After Trump Victory

U.S. and European indices rise, while Asian indices fall.

A day after Donald Trump’s election win, Wall Street experienced a surprising upswing. It was feared the market would plunge on November 9 since many investors were anticipating Hillary Clinton to triumph in the presidential race. Quite the opposite happened.

As the trading day ended, the Dow Jones Industrial Average notched a close of 18,589.69, thanks to a 256.95 gain. The Nasdaq Composite rose 57.58 to a close of 5,251.07, while the S&P 500 settled at 2,163.26 after a 23.70 jump. Gold futures gained 0.29% to $1,278.20; light sweet crude futures rose 0.80% on the NYMEX to settle at $45.34. Meanwhile, bond prices fell and the yield on the 10-year Treasury rose to 2.08% Wednesday.^1,2

The key European markets also seemed to be accepting the idea of a Trump presidency with relative calm. November 9 saw gains of 1.56% for Germany’s DAX index, 1.49% for France’s CAC-40, and 1.00% for the United Kingdom’s FTSE 100. The Stoxx Europe 600 advanced 1.46%.¹

This did not apply for the important Asian markets, where the trading day ended hours before action on Wall Street began. The biggest loser among the indices was the Nikkei 225. The Japanese benchmark slid 5.36%. Lesser losses were incurred by Hong Kong’s Hang Seng (2.16%), India’s Sensex (1.23%), and China’s Shanghai Composite (0.62%).¹

Why did Wall Street turn so bullish a day after the upset? Credit was quickly given to the victory speech Trump delivered very early Wednesday morning. In speaking to the Associated Press, Eric Weigard, senior portfolio manager at U.S. Bank’s Private Client Reserve, noted Trump’s “remarkably conciliatory posture,” which communicated a “presidential disposition, and gave a greater sense of calm.” Also, some institutional investors saw a buying opportunity: billionaire Carl Icahn told Bloomberg he was devoting about $1 billion to equities on Wednesday. “People are starting to realize that a Trump presidency is not the end of the world,” remarked Tom di Galoma, managing director of trading at Seaport Global Securities. Investors are hoping the optimism displayed on Wall Street Wednesday will be sustained.²

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

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Citations.

1 - markets.wsj.com/us [11/9/16]

2 - stltoday.com/business/local/u-s-stocks-rally-following-trump-victory-dow-closes-just/article_250baf34-2237-5cee-a725-c1f2d2dc0415.html [11/9/16]