On Wednesday, the Dow made history when it crossed the 20,000 threshold for the first time. Naturally, Donald Trump’s team took credit for the news and touted his election win as the cause of this historic moment.
The Dow has been inching towards 20,000 for months with some standard ups and downs. CNN Money reports that the Dow has accumulated 1,667 points since Trump’s election victory. It’s a noticeable jump, as investor initial trepidation of Trump presidency may have subsided. This was enough for Trump’s surrogates to pop the proverbial digital champagne, patting themselves on the back on Twitter, and he responded to the news with a “Great!”
Trump made job growth and the economy a main concern during the infancy of his presidency, and CNN points out how his supporters were optimistic about his plans to “slash taxes, ramp up infrastructure spending and cut regulation will make the American economy grow faster.” These promises may have contributed to investors’ confidence, but not everyone is sold. Yahoo noted Goldman Sachs strategist believes policy will shape the market:
“Policy uncertainty was a topic of concern raised in every client meeting … While we expect corporate tax reform legislation will be enacted in 2017, the magnitude of cuts and offsetting revenue proposals are unknown. Many tax reform ideas have been discussed in general terms but the administration has not yet endorsed any specific proposals. Investor confusion increases when a topic that appears to be gaining political momentum — such as border-adjusted tax reform — is suddenly discredited when the President dismisses the idea saying it is ‘too complicated.’”
The Dow hitting 20,000 won’t solve the economy’s problems, but it could be a step in the right direction. Now, folks will be waiting to see if Trump fulfills his campaign promises, such as cutting taxes and fortifying U.S. trade.