How Donald Trump’s Stimulus Hopes Will Affect The Dow Jones

The U.S. presidential election results spiraled through the financial markets last week,  impacting positively on the U.S. stock markets, global equity markets and the US dollar.

The Dow Jones 30 climbed by 5% last week – the sharpest jump in five years.

The new elected president – Donald Trump, pledge to “dismantle the Dodd-Frank Act” and replace it with new policies that will encourage economic growth. Trump’s policies are feeding hopes that it could be a catalyst to spur pre-emptive banking moves to New York from London.

For the financial sector, if the banking environment becomes less onerous, Goldman Sachs, JPMorgan, Citigroup and other banks from America have significant headcount in London, might relocate their investment-banking roles to Wall Street. Asian and Japanese banks might follow the same fiscal expansion plan, which is expected to reflect extensive investments in infrastructure.

Manufacturers of heavy mechanical equipment required earthworks for new interchanges, airports runways, etc. There is no doubt that these companies will benefit from the resumption of the American infrastructure, and these companies are the core of Dow Jones – shares of the “old economy”.

Trump will focus on internal US economy and try to promote it. He will be a president with a Republican Congress and Senate. Trump will have the strength to make changes, which might be good for the economy and financial markets.

Trump’s ideology could benefit the markets as he is a businessman who wants to cut bureaucracy, corporate tax and benefit greatly with a profitable businesses.

Markets Rally is Expected to Continue

At the moment it seems that the Dow Jones ındex will perform the best among other indices.

You can see the candles and cycles in the graph below – pattern that represents buyers are willing to buy at lower prices when it comes to the bottom line.

Support levels: Amendment to the 18,620 would not be surprising, as long as the index will be supported above the 18,340 level, the trend is up. However, if the Dow Jones will break down below 18,340 points again, I’ll analyze the situation again.

Good luck for all