NEW YORK (AP) - The Trump Rally looks like it is back on again – at least for now.
Even though Wall Street didn’t get the nitty gritty details they hoped for on things like tax reform and trade policy from President Trump last night in his speech to Congress, stock prices were moving sharply higher early Wednesday, with the Dow Jones industrial average hitting 21,000 for the first time as investors viewed Trump’s more “presidential” tone as a signal that he will have a better chance of getting his economic agenda through Congress.
On Tuesday, the Dow’s streak of 12 straight sessions of record highs was snapped with a 25-point decline.
In his address to a joint session of Congress, Trump reiterated his push for “historic tax reform” that will put American businesses on a level playing field with foreign competitors, repeated his calls for a $1 trillion infrastructure spending plan and noted that his administration has “undertaken a historic effort to massively reduce job‑crushing regulations.” The president also said his plans for a repeal and replace Obamacare.
Wall Street grabbed on to Trump’s more conciliatory and upbeat message, such as his call for a “renewal of the American spirit,” and his promise that “dying industries will come roaring back.”
Trump’s pledge to work across the aisle with Democrats raised hopes on Wall Street that his agenda will now have a better chance of being implemented.
“I think investors were set up for hearing a real negative speech, which is more indicative of Trump’s style,” says Wayne Wicker, chief investment officer at ICMA-RC. “Just having a positive tone suggests to investors that his fiscal policies might have a better opportunity to move forward.”
Adds Dan Clifton, a Washington policy analyst at Strategas Research Partners: "(Trump) set out a course for Republican members of Congress to rally around. He also sent a signal to Democrats that he is willing to work with them."
Indeed, the president's speech laid the groundwork for the start of Trump’s push to get his legislation passed, says David Kotok, chief investment officer at Cumberland Advisors. Trump’s words might also have bought him some time with increasingly impatient investors.
“Wall Street is giving him more time after this speech; not a lot more but some,” says Kotok. “Acting as an adult, he has pushed back the timeline of reaching a deal with Congress. The speech was his best ever as a president. It was salesmanship. Making the deal starts with selling it.”
Despite the good reception of Trump’s speech from Wall Street, there are still risks facing a stock market that has run up sharply since Election Day on hopes Trump will get his agenda passed, notes Greg Valliere, chief strategist at Horizon Investments.
“The markets saw a strong president, and they liked it,” says Valliere. “Fears of a stumbling administration have been allayed, at least for now. Trump’s temperament always was a market concern, but suddenly there's hope that he's growing in the job.
Despite the mature demeanor, the markets are still leery that Trump’s agenda could stall if the divided congressional Republicans can't agree on an Obama are replacement.”
Stocks were also trading sharply higher in Europe and finished higher in Japan.
Copyright 2017 USA TODAY