Monday, December 5, 2016

Trump Surge Builds on Obama’s Recovery

After the boom market in 2007 when 1000 points was added to a 14000-point DOW in 49 days, it was four years before a similar 1000-point rise in May of 2013. The DOW went up 257 points on Wednesday after the election (Election Day the DOW was 18332). The DOW crossed 19000 on November 22. It took more than a year to get there, from 18000 registered back in December 2014. A very slow slog, at least partially related to oil prices, which now seem to be headed above $50 a barrel. Barack Obama can take some credit for the economy from 2009. The DOW today is 19191. If the rally continues, 20000 is definitely in sight by January.

The stock market was neither anticipating a Donald Trump win nor was encouraged by the possibility. The market declined after the first Comey email announcement on October 28(273 points in the following week) and rebounded nearly 400 points on the Monday prior to Election Day after the Sunday news that there was no legal issue to pursue.

Pundits and investors were both wrong in their prediction of the election result and wrong about the market reaction.

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