Posted By RichC on April 1, 2017
The “Trump Rally” as many have dubbed it, provided investors with solid quarterly gains as a brighter economic outlook offset the lackluster Washington DC agenda which has become bogged down in politics. Investors still believe job growth, better corporate financial returns and tax cuts will over shadow the Fed “applying the brakes” in the form of higher interest rates.
The S&P 500 index’s 5.5% rise in the first three months of the year extended the post-election gains sent major U.S. indexes to records, but in March were dialed back a little. The big mover in the first quarter was the tech sector. The S&P 500 jumped 12% in the first three months of the year and was best performer out of the 11 sectors in the index. The Nasdaq Composite Index ended the quarter up 9.8% to record its best quarter since 2013.
The WSJ round up of the first quarter pointed out some recent hesitancy after the Republicans failed to replace Obamacare … and that fear is creeping into concerns that the much needed corporate and personal tax-cut could face a long slow trod.
The Dow Jones Industrial Average, which has a hearty weighting of industrial companies and big banks, posted a 4.6% gain, a slowdown from the previous quarter. On Friday, the Dow industrials fell 65.27 points, or 0.3%, to 20663.22. The blue-chip index dropped 0.7% in March, its biggest monthly decline since October. The S&P 500 fell 5.34 points, or 0.2%, to 2362.72. The Nasdaq Composite dropped 2.61 points, or less than 0.1%, to 5911.74.
The failure of Republicans’ health-care bill, intended to replace the Affordable Care Act, has led investors to question the Trump administration’s ability to implement other agenda items like a corporate tax overhaul, looser regulations and fiscal spending.