Dow Finally Hits 20,000

The Dow Jones Industrial Average has risen over 2,000 points since the pre-Trump lows and finally smashed its way through 20,000 for the first time after treading water for 28 days. Infrastructure plans and executive orders appear top have scare buyers back into the stock market (even though other Trumpflation indicators remain unimpressed). Of course the big driver was Goldman Sachs, which accounts for over 20% of all the gains by itself…

28 days going nowhere but finally we broke it:

The Dow has surged some 2150 points since the election:

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The Dow’s gains since the election reflects mostly major gains for banks, including shares of Goldman Sachs, which are up 29% and JPM up 21%. In fact, Goldman alone is responsible for 21% of the Dow’s increase.

Since the start of the year, however, the rally in the two groups has cooled, with investors rotating into Visa and Nike, two stocks that lagged behind from the election to the end of 2016 but are now up by more than 5% in 2017. IBM has also risen by 6% despite disappointing results.

The biggest ‘dip’ since Trump’s victory has been 1.3% and the last month has seen the lowest trading range for The Dow in history…

Dow 10 and 15k saw the market oscillate around that level for 6-12 months… (as Art Cashin noted we crossed Dow 10k 57 times before finally leaving it behind)

Since The Fed hiked rates, VIX has collapsed to a 10 handle and the lowest level since July 2014, but the market has trod water for 28 days unable to break Dow 20k until the last two days rampathon…

Bear in mind that The Dow had gone nowhere since Nov 2014 until the election…

Interestingly, while the reasoning for this 2 day surge is a reignition of the trumpflation trade, it appears the USD, inflation swaps, and bonds are not buying it…

Certainly the last 3 days have seen a notable divergence…

Notably S&P 500 also broke to fresh intraday record highs (as did Nasdaq)

And who is responsible for this exuberance… Simple – Goldman Sachs…

In fact just 6 stocks account for 50% of the gains – GS, BA, IBM, UNH, HD, & JPM.

But since Brexit, banks are the big winners…