After remaining closed on Monday for President Day holiday, the US markets opened with most stocks in green and that too on record-highs. The strong results of the retailers and the rising oil prices improved the sentiments of the markets and gave all reasons to the investors to cheer. Wal-Mart’s shares rising by 3% gave the biggest boost to the Dow. Another major index of the US, S&P 500 has already crossed the analysts’ expectations for the current year.
While most of the investors are cheering, those in the bearish camp may give the argument that out of 100, 40 companies are still making losses. The market is in an upbeat mood since Trump’s victory. Now it’s waiting for him to fulfil his promise of phenomenal tax cuts. With this tax cut happening, around $12 billion will be added to the US banks alone. This will help in bringing down the cost of borrowing, helping the companies in a big way. The robust economic data, strong earnings posted by the corporates, and the likelihood of fiscal stimulus under the new leadership has lifted the sentiments of Wall Street, which has helped in taking all three indexes to record highs.
The comments by the top Fed officials have made the dollar steady. From past few days, various officials like President of Cleveland Federal Reserve Loretta Mester, Fed Chairwoman Janet Yellen, and Philadelphia Fed President Patrick Harker have all indicated that economy of US is on the right path. They have also indicated that the Central bank might announce the rate hike in their very next meeting, which is scheduled to happen in May. However, Neel Kashkari, Minneapolis Fed President has different views. He is of the opinion that the central bank should not go for rate hike anytime soon as the U.S. labour market had “more room to run.“
At the indexes today, shares of both, Home Depot, the home improvement chain and Department store bellwether Macy’s were in green as both these companies posted numbers better than the market expectations. Schlumberger and Chevron led to energy sector jump by 0.75 percent in S&P 500. Not only the energy sector, in fact, out of the eleven, nine major sectors on S&P 500 were trading higher. The only outliners on the index were the utilities and the real estate sectors. The major dragger on the index today was Kraft Heinz after the news of it walking away from the Unilever deal became public.