It would seem the market has spoken. The Dow Jones Industrial Index closed yesterday above 20,000 points for the first time in history. This a mere three trading days after Donald J. Trump was sworn in as the 45th president of the United States. The number belies the rhetoric. Traders, in spite of their outward doubts about Trump, seem to be showing confidence in the economy.
And why should they not be confident? In less than a week in office, Trump has made good on no fewer than four campaign promises by exercising the power of executive orders. To those who argue that the executive orders are mostly symbolic, a fifth promise is on the path to fulfillment after the House voted on a bill to make permanent the Hyde amendment. In addition to proving he is a man of his word, President Trump is showing he is also a man of action.
Interesting to note is the timing of this symbolic economic milestone. The fact that it did not happen until a half a week into the new President’s term is extremely telling. For the past five days, traders observed our new leader. They watched as he sprang into immediate action. They witnessed the rapid advance on all fronts towards the implementation of Trump’s campaign promises. And on Wednesday they passed judgment.
The market ruled this week that Trump is going to be good for business and good for the economy. With commitments to do something about Obamacare, immigration, federal hiring, infrastructure, and public safety being aggressively met, the economic priorities are undoubtedly on their way.
Even today, we are in a different place economically than we stood a week ago. The fate of the Trans-Pacific partnership was sealed after decisive action by President Trump. Approval of the Keystone XL pipeline is back in play. The continual bloating of the federal bureaucracy, turning dimes into nickels, has been halted. And the ticker symbol DJI on Wednesday proclaimed that there is much more to come.
Interestingly enough, Boeing led the march to 20,000 with a 4% gain. Ironic because less than two months ago, Boeing stock suddenly dropped after then President-elect Trump tweeted about possibly canceling an order for Air Force One upgrades due to their high cost. The market is starting to realize that Trump isn’t going to sink the economy through contract-cancelling tweets – he’s going to grow it by coming to the table to negotiate even bigger deals from a position of strength.
The market believes that more is yet to come. A pro-growth tax plan, regulatory reform, expansion in the energy industry: all are now eagerly anticipated and expected to drive the Dow even higher while putting Americans back to work and growing our GDP. If this week is any indication, more record-breaking days are on the horizon.