Immediately after the announcement of the US election results on 9 November, the US stock assets suffered the most severe losses in a few months. However, the significant decline has shifted to the rapid growth. Last week, the rise in the major U.S. indexes had slightly slowed down; however, the closing prices were still high.
Last week’s results were as follows: the index S&P500 has grown by 0.8%. Sub-index of the technology sector of the index S&P500 has grown by 1%, sub-index of &P500 in the financial sector has grown by 2.2%. DJIA has grown by 0.1%, against 5.4% a week before that, which was the highs since 2011.
For the week which ended on 16 November, the inflow into the U.S. equity funds, including financial, medical, biotech and industrial sectors was very high. Expectations of the fiscal stimulus and the rise in the yields of the government bonds has triggered the rise in the USD to the highs in over 13 years.
The US economy is growing; it is expected that spending on infrastructure will increase next year, which will be favourable for the US economy in the short term, interest rate can be raised in December, which will continue to trigger the rise in the shares of the banks and financial sector.
Today, financial markets may undergo correction after the rise last Friday. However uptrend in the U.S. indices, including DJIA will continue.
At the same time, the indices may slightly go down in view of the profit taking after the recent rally in price.