BlackRock: Trump-fueled US stocks rally ended

US stocks rally ended as the stocks and other assets may have topped out for now. The US market needs time to digest the recent gains.Where stocks headed further?

30 November, AtoZForex – The three major domestic indexes and the small-cap Russell 2000 index have climbed to record highs in the days since the presidential election. Banks have led the rally, and industrials have hit all-time highs as investors bet on Donald Trump’s promises of infrastructure spending, tax cuts and slashed regulations.

US stocks rally ended 

The Russell 2000 has been a top performer, surging more than 12 percent since the election. The S&P 500 has surged more than 3 percent. Some take the strong performance of the small-cap stocks as a good signal for equities overall since those companies generally do better when the U.S. dollar is enhancing with expectations of better U.S. economic growth.

On Monday, the small-cap index posted its first decline after on Friday posting its first 15-day win streak since February 1996. The S&P 500, Dow Jones industrial average and Nasdaq composite closed slightly lower, after ending at records in Friday’s half-session, with the S&P at 2,213.35.

Blackrock Analysis 

Market analysts  also don’t see the benchmark index going much higher in the next few months. The average year-end target on the S&P 500 is 2,209. According to the survey of 15 market strategists last week, which involves two firms that gave only 12-month targets. One of the 2017  dangers for US equity investors is declining earnings expectations. Moreover, there are some near-term risks. He also said the first year of a US presidential administration is generally not a good year for stocks.

The S&P 500 has fallen an average 2.7 percent in the first year of a Republican president’s first term. Markets also haven’t priced in much downside from the feasibility of more protectionist trade policies. During his event, Trump called for a 45 percent tariff on goods imported from China.

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