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article imageOp-Ed: Toronto Stock Exchange reaches record high as do U.S. markets

By Ken Hanly     Feb 10, 2017 in Business
While media reports are all about the problems and protests generated by U.S. President's Donald Trump policies stock markets at the end of the week continue what many call the Trump rally.
The Toronto Stock Exchange's S&P/TSX composite index closed the day up 111.82 or .72 percent at 15,729.12. On the week it rose 1.6 percent. Higher oil prices, and a surprise surge in domestic job growth also suggested a brighter economic outlook. However, there is also an expectation that Trump will announce a business-friendly tax cut soon.
US markets also moved higher to fresh highs reacting to higher oil prices and optimism about the positive effects on business of Donald Trump's economic agenda. Paul Taylor, chief investment officer at BMO Asset Management said; "Donald has promised a 'phenomenal' tax plan. At this stage they're willing to bet that in fact it will be somewhat stimulative. It's a pro-growth, cyclical-led rally." The financial group gained 0.5 percent while materials rose by a larger 1.5 percent. Oil was also up 1.5 percent with crude at US $53.79 barrel. Brent crude rose even more at 1.8 percent to US $56.64. Canada added 48,300 jobs last month far exceeding economists' prediction of no employment growth.
Wall Street opened the day with record highs and set new records. Markets focused on Trump's claim that there will be a tax announcement in the coming weeks. It is expected businesses will enjoy substantial tax cuts. The Dow Jones Index(DJI) hit an all-time high of 20,232.98 points. The Nasdaq 100 also hit a new high of 5,225.585 points. The S&P 500 reached 2,313.67 points.
Since Trump was elected president on November 8 last year the S&P has risen by 8.3 percent. There are expectations that Trump will lower taxes, reduce regulations and boost spending in infrastucture. These will all have positive impacts on corporate profits. The rally had stalled early this week but is now continuing. Kim Forrest, senior equity analyst at the Fort Pitt Capital Group in Pittsburgh said: "Investors were worried that the administration may have gotten off track and was pursuing other items..Tax cuts have gotten put back on the front burner. We are looking for gains in the economy at large from this, not just [earnings per share] gains in stocks." Investors seem reassured that tax breaks are coming. A key international index also rose.
Large US companies are set to show the second straight quarter of profit gains after several quarters in which they suffered declines. Jason Ware, chief investment officer at Albion Financial Group, said:"We are seeing a pretty solid rate of beats and we're out of the earnings recession."
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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