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Dow Jones Blasts Through 21,000; NASDAQ Hits Record High on Trump’s Optimistic Tone

By:
James Hyerczyk
Published: Mar 1, 2017, 16:39 UTC

The Dow Jones Industrial Average spiked through 21,000 for the first time on Wednesday, reaching an intraday high of 21069.97 before easing. The cash

Dow Jones

The Dow Jones Industrial Average spiked through 21,000 for the first time on Wednesday, reaching an intraday high of 21069.97 before easing. The cash market Dow opened higher and never looked back after the futures market began mounting a recovery following an overnight setback.

Initially, stock investors expressed mixed feelings about the markets after President Donald Trump ended his first speech before a joint-session of Congress on Tuesday night. Investors heard his message, but reacted as if they had heard it before. This raised doubts about whether the rally would continue because Trump, once again, failed to reveal any details of his economic policy plans.

However, by the time the cash market was set to open, investors had digested Trump’s speech and felt that it struck a strong enough optimistic tone to continue the rally that initially had been set in motion way back in November when the Dow was still below 19,000.

In addition to the Dow, the S&P 500 Index was also up 1 percent and the NASDAQ Composite added about 0.9 percent. The major indexes were also supported by strong gains in Asia and Europe.

Crude Oil

Crude oil prices moved in both directions before investors were able to drive them higher as investors expressed mixed reactions to the U.S. Energy Information Administration’s weekly inventories report.

The EIA reported on Wednesday that crude inventories in the U.S. rose to a record high. The agency said that U.S. crude stockpiles rose 1.5 million barrels the week-ended February 24, less than the forecast, but reaching a record high 520.2 million barrels after eight straight weekly builds.

The EIA also reported that supplies at Cushing, Oklahoma, the futures delivery hub, increased by 495,000 barrels last week.

The weekly report also showed that gasoline inventories declined by 546,000 barrels, compared to expectations for a drop of 1.789 million barrels. Distillate inventories reported a decline of 925,000 barrels.

Economic Reports

Personal income rose 0.4 percent in January, beating the 0.3 percent estimate. However consumer spending slowed, coming in at 0.2 percent, slightly below the 0.3 percent estimate.

The Fed’s favorite indicator, the Personal Consumption Expenditures (PCE) price index came in at 1.9 percent annually and 0.3 percent monthly, putting inflation very close to the Fed’s target of 2 percent.

The big surprise was the drop in construction spending. It fell 1 percent in January, coming in well below expectations. The February ISM manufacturing index rose to 57.7, better than the previous 56.0 reading.

The CME Group’s Fed Watch Tool is now up to 70 percent. This means that investors are starting to bet on a March 15 Fed rate hike. Later today at 1900 GMT, the Fed will release its Beige Book.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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