2016-11-14 16:18:26

After the sharp fall immediately after the announcement of the first results of the presidential election in the United States on Wednesday 9 November, the US stock market has changed movement direction. However, at the early European trading session the indices have regained half of the losses.

Currently, the rise in the USD and major US indices continues at the record pace. Investors’ risk appetite is increasing after the victory of Donald Trump in the presidential election.

On Thursday, the yield of the 10-year Treasury bonds has increased to 2.118% to the record four-day highs since June 2013.

Last week the biggest rise was recorded in the shares of the industrial companies and banks.

The rise in stocks, which investors believe can go up due to the increase in government spending, reduction of regulations and the increase in inflation during the presidency of Trump, was the highest.

In a week the index DJIA has grown by 5.4%, which is the highest rise since December 2011. Indexes S&P500 and Nasdaq Composite have grown by 3.8%. Sub-index of the industrial companies incorporated in the index S&P500 has increased by 8%; sub-index of the financial sector has grown by 11%.

The USD and the US stock market are supported by expectations that the new President of the USA, Donald Trump will adopt fiscal incentive measures to support economy, which will lead to the rate hike. In case of the increase in expenditures and tax cuts, economic growth in the USA will increase and if the US fed raise interest rate in December it will create attractive conditions for the foreign inverstments.

It is not clear what will be the consequences of the economic plans. It is likely that after the strong rise the US stock indices will undergo correction.

On Thursday at 18:00 Janet Yellen will give a speech. If her speech shows probability of the rate hike in the US until the end of the year, the USD will sharply grow in the currency market. According to the futures for the Fed rates, probability of the monetary policy tightening in December is 81.1%.

DJIA: The rise in the USD and American indices continues.  Fundamental analysis for 14.11/2016