MANILA, Philippines – On Monday, the United States equity indices hit record highs. The benchmark S&P 500’s topped market value of $20 trillion. This happens as investors expect United States President Donald Trump to make good his promise on tax cuts mainly to boost the economy.
Last Thursday, the United States President made a promise regarding a major announcement on tax reforms where the announcement will be in the next few weeks. This fueled more the criticisms against him as worries heighten on the potential impact of President Trump’s stance and the vague language he uses in making reforms in other policies.
Since Trump’s victory in the election on November 8 last year, S&P 500 has climbed about 9 percent. The surge was driven by the expectation of lower taxes in corporations, increase infrastructure spending and easement of existing policies that govern banking industry, specifically the Dodd-Frank Policy which was put in place during the aftermath of the 2008 financial crisis.
High-profile meetings were held by Trump as well including with senior executives of the auto industry and technology companies in Silicon Valley.
A Harris Financial Group managing partner based in Virginia said that Trump meets corporate executives coming from various industries day after day. This means business is again in the driver’s seat that is why investors are willing to pay for stocks at a higher price. The financials index of S&P 500 rose 1.1 percent wherein Citigroup (C.N) increased by 2.3 percent. The industrial sector, on the other hand, is up 1 percent. These aforementioned sectors are expected to benefit the most from Trump’s policies and reforms.
According to Thomson Reuters, the robust economic data in the previous weeks was supported by optimistic corporate results. Listed companies see their strongest growth in profit in nine quarters.
The underlying factor in the rhetorical statements made by Trump is that the fundamentals, not only in the United States but all over the world are getting better. This was noted by Northwestern Mutual Wealth Management chief investment strategist, Brent Schutte.
Industrial Average of Dow Jones is at 20,412.16 points, this equates to an increase of 0.7 percent. The S&P 500 .SPX ended at 2,328.25 points or an increase of 0.52 percent.
A component of all three indices, Apple, gained 0.9 percent which closed at a record high that is the first time since 2015. The target price for Apple’s shares was increased by Goldman Sachs as expectations of strong sales in iPhone is highly expected for this year.