Rally on rate bets

Andrew Cummings
March 2, 2017

At 10:02 a.m. Central the Dow Jones industrial average was up 238.4 points, or 1.15 percent, at 21,050.64.

If the level holds through the closing bell, it will tie the fastest thousand-point jump in history: It took 24 sessions from the first close above 10,000 for the index to climb to 11,000 in 1999. The Nasdaq composite lost 18 points, or 0.3 percent, to 5,843. Gains were broad with the biggest increases seen in the basic materials and financials sectors.

Markets have been on a historic run since Trump was elected. That's normal. But this bull market is far from over.

The White House began sketching its spending plans in an outline budget Monday as Trump said he has no choice but to spend on infrastructure, while adding that tax details won't become clear until after the costs of repealing the Affordable Care Act are known. "There is real economic improvement now that has sparked much of the rally".

WHIFFED: Target plunged 12.7 percent after the retail chain's latest quarterly profit fell short of Wall Street's forecasts.

"Policymakers have been falling over themselves in the rush to suggest the U.S. economy is ready for another hike, just one quarter after the last one", said Chris Beauchamp, analyst at IG.

"The market has flipped from being skeptical that a move in March was likely, to now thinking it is more likely than not", said Luke Bartholomew, an investment manager at Aberdeen Asset Management. Recently, Kaplan revealed that the Fed should leave its options open to a rate hike in March.

Mr Trump's speech lacked "fresh content for the market to trade off, with big tax cuts, deregulation and an infrastructure plan being mentioned but not supported by any details", Mr McGuire noted.

-In Trump's address before a joint session of Congress on February 28, the president is expected to lay out his plans for tax and health-care reform and infrastructure spending.

Recent gains have been fueled by Trump's November election. They may finally get that on Tuesday evening, when the president delivers his first address to Congress.

Stocks were also trading sharply higher in Europe and finished higher in Japan.

How long can the rally last?

"The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay", Lawrence Yun, NAR chief economist, said in a statement.

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