Market Conditions

More Of The Same For Wild Stock Markets?

Stocks and Bull Run

In just the first few days after what can only be termed stunning election results, the stock market’s rise can only be viewed as stunning as well.

On Thursday, the Dow Jones Industrial Average notched an all-time high. Conversely, the tech-laden NASDAQ fared less well.

For the Dow, bank stocks and manufacturing firms have been on the come, on the assumption that regulatory activity will get scaled back, and some regulators significantly even hobbled by Trump and the Republican Congress, with targets including the CFPB. Such efforts would, by extension, mean higher operating profits for banks and other firms who may find compliance efforts easier to deal with (and cheaper).

Thus the Dow closed the day at about 18,800 points.

As of Friday morning (Nov. 11), the markets had backed off a bit, largely across the board. But only by a bit — 17 basis points really are not all that much. Apple slipped more than 2.5 percent, roughly around the same levels that Microsoft did, while other firms dropped a bit more.

One reason, Reuters said, could be that investors were selling these firms to raise money for a rotation into other investments/equities. The tech sector, at more than 16.2 times forward earnings, has proven relatively more expensive than materials at just under 16 times earnings, so it is possible that some investors were rotating from relatively expensive to relatively cheaper names. They could be, and could have been, looking to buy more traditional industrial and manufacturing stalwarts that would benefit most directly from Trump administration stimulus plans. As had been noted during the campaign, those plans include stated desires to ramp domestic spending on infrastructure and public works. Perhaps a bit further down the line there may be clarity on efforts to curb international trade (which may hit global retailers and, by extension, eCommerce and perhaps banking cross-border efforts).

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