The Dow Jones Industrial Average blew through the 21,000 mark for the first time on Wednesday as stocks resumed their record-setting rally after a one day breather.
It took just 24 trading days (and 35 calendar days) for the index to reach this latest landmark interval from the prior one of 20,000, which it touched on January 25.
Notably, this ties for the fastest ascent between landmark intervals. The last time the Dow gained 1,000 points between psychologically important points was back in 1999: It hit 10,000 on March 29, 1999 and then jumped to 11,000 on May 3, 1999.
Moving back to the present, stocks climbed after the more measured tone in US President Donald Trump’s speech reassured some investors. Bank stocks led the charge as chances of an interest rate hike this month increased.
In his first address to a joint session of Congress late Tuesday, Trump said he wanted to boost the US economy with a “massive” tax relief, make a $US1 trillion effort on infrastructure, and overhaul Obamacare. However, his comments lacked in detail.
Trump “repeated many of his previous themes, but in a more measured, less combative tone than in previous speeches. However, he did not offer many new details on economic policy,” Lewis Alexander, Chief US Economist at Nomura, wrote in a note. “In summary, we did not learn much [on Tuesday] that would influence our economic outlook.”
“Broadly speaking, President Trump did not materially resolve key uncertainties regarding the outlook for economic policy — such as the outlook for taxes and spending, infrastructure, trade, and exchange rate policy — in his speech [on Tuesday night]; we believe it will take many months before we have clear answers to all of these issues,” he added.
Let’s jump to the scoreboard:
- Dow: 21,115.55, +303.31, (+1.46%)
- S&P 500: 2,395.96, +32.32, (+1.37%)
- Nasdaq: 5,904.03, +78.59, (+1.35%)
- US 10-year yield: 2.454, +0.096
- WTI Crude: $US53.68 per barrel, -0.33, (-0.61%)
1. Businesses are expecting inflation to rise in the coming months, Fed’s Beige Book says. The Beige Book repeated that the economy continues to expand at a moderate pace, amid promises from the new administration to return the economy to 3% growth.
2. Personal spending missed, but personal income beat. For the month of January, personal income rose by 0.4% and personal spending came in at 0.2%. Economists had forecast that both personal income and spending would rise by 0.3%.
3. Ray Dalio is stepping down from managing the world’s biggest hedge fund firm amid a company-wide shake-up. Dalio will stop managing Bridgewater Associates by mid-April, according to a client note Wednesday reviewed by Business Insider. Dalio said in the note that he had “temporarily stepped back into management” 10 months ago to help transition Greg Jensen’s co-CEO role.
4. Traders are making a killing betting against retail. In a note sent out to clients on Tuesday, S3’s head of research, Ihor Dusaniwsky, said that the top five most profitable short trades in multi-line retail so far this year are all traditional brick and mortar retailers who “depended on strong foot traffic and higher margins to support their infrastructure and staff are being forced to find ways to cut costs, increase margins and eliminate underperforming locations.”
5. Treasurys got smashed as sellers pile on after Trump’s speech. Selling pushed yields up more than 7 basis points in the intermediate part of the curve with the 10-year back up at a two-week high.
6. Bitcoin climbed to a fresh record high. An aggressive bid has the cryptocurrency up 2.1% at $US1,204.43 per coin as traders continue to pile in ahead of the upcoming Securities and Exchange Commission ruling on whether or not it will approve at least one of the three proposed bitcoin-focused exchange-traded funds by the March 11 deadline.
7. The Bank of Canada is in “wait and see” mode. The bank held rates again at 0.50%, as virtually everyone had expected, and wrote in its accompanying statement: “While there have been recent gains in employment, subdued growth in wages and hours worked continue to reflect persistent economic slack in Canada, in contrast to the United States.”
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