Last week, the Dow Jones Industrial Average surged to a record high after US President Donald Trump announced that he would be making a major tax announcement in the coming weeks.
The announcement, which was made by President Trump during the meeting at the White House along with airline industry executives, was followed by comments from the president that “Lowering the overall tax burden on American business is big league” although he gave very little hint as to when exactly the announcement will be made.
Dow Hits New High
Along with the Dow Jones industrial average rising by as much as 100 points, hitting 20,000 for the first time, the Nasdaq also rallied by 0.33%, while the S&P 500 rose up by 0.36% mostly driven by the rise in the energy sectors.
Among the top risers includes stocks from the banking sector, including Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) rising as much as 0.78% becoming the highest stock on the Dow. Stocks under the favor of a Mexican border wall, including CRH (LON:CRH), an Irish cement firm rallied by as much as 39%.
Aside from the positive market reception to the initial tax plan announcement, the Dow also recorded the record high on better-than-expected employment reports.
According to analysts, despite the lack of data to whether when Trump will announce the tax update, this is a strong hint to the markets that the president intends to make a major tax plan sooner than most have expected. As the Dow topped 20,000, most investors received this as a sign of health for stocks under the Trump administration. Companies such as Boeing (NYSE:BA) recently arose on their stronger than expected earnings report.
Following the recent high the Dow recorded, the construction and initial plans regarding Trump’s plans to put up a wall along the Mexico and US border might boost the market including some European stocks further in the coming weeks.
US and Mexico Border
Just a couple of weeks ago, Mexican President Enrique Peña Nieto canceled a trip to Washington originally scheduled for a meeting with the US President after Trump signed an executive order that will enforce the construction of the border wall between the US and Mexico. The wall is set to cost at around $12 billion to $15 billion, although it is unclear yet to whether how the government would be able to sustain the costs.
According to Trump, the border construction will be overlooked by the homeland security secretary and his administration as the construction will be started immediately.
Aside from this, another executive order was signed by Trump cutting the funds of the sanctuary cities originally opened due to the cooperation between federal immigration agencies and the local law enforcement to make Mexico pay for the costs of the border construction. President Nieto insisted that Mexico will not pay for any costs in the border wall construction and said in a tweet that Mexico will continue to work with the United States in agreements that would benefit both countries.
Sean Spicer, press secretary for Trump stated that the office would try to schedule another meeting with the Mexican president, adding that they are keeping their lines open should Nieto change his mind.
Meanwhile, President Nieto is facing criticism for his inability to combat Trump’s protectionist plans and policies in the middle of an ongoing issue between the two countries divided foreign policies threatening trade gaps.