Stocking the markets

2017 brings new highs on Wall Street after President Donald Trump takes office

This chart specifies the moments of highs and lows in the stock market from the presidential campaigns through election day.

The infamous St. Patrick’s Day leprechauns may have arrived slightly early this year after a pot of gold was found on Wall Street. The Dow Jones Industrial Average, or the Dow, has reached a record high after closing above nearly 21,000 points on March 1, nearly 1,000 more points than previously recorded. The Dow represents 30 different stocks from the New York Stock Exchange in a price-weighted average setting.

Wall Street seems to be a pretty common phrase amongst Americans, but what does the term actually imply? Also known as the equity market, the stock market is a share of public businesses in which anyone can place stocks. The importance of the stock market, in general, is one of the key factors for success in a free-market economy.

Anyone is permitted to place exchanges into the market, choosing which businesses they wish to provide funds to and in turn receive a certain percentage of profit from that specific company’s success or failure. Some cases bring a great amount of success, when the companies are given more money to run and their profits increase, allowing investors to receive a set of funds in return.

While many factors played a role in the large leap for the market this month, a large contributor seems to have been President Donald Trump’s address to Congress on Feb. 28, according to CNN strategists. A hopeful and free-spirited message of optimism seems to have provided hope in the eyes of investors, allowing more gambols to take place and more businesses to thrive off of their stakes.

Financial Literacy teacher Mr. Ed Shephard provided his insight on the historical markets. Shephard, who has a degree in economics, mentioned that he isn’t too involved within the market itself but that some investments have been made from his savings account into different stocks.

“There’s a large mental game as to how [the events in the stock market] go,” Shephard explained. “[It’s] supply and demand that drives the DOW… If [Trump] can deliver what he talked about, it’ll help business.”

Shephard noted that as Trump eliminates regulations affecting businesses, the businesses don’t have to spend as much money. He explained that people are hopeful for the future, causing them to allot more of their funds into investments such as the stock market.

To place this number in perspective, the market itself raised over 2,700 points since the election in November, only continuing to rise as Trump continues his strategies as the nation’s leader. All in all, the banks have appeared to receive the most support after these surges, proving to be the big winners from Trump’s election.

While the banks are encouraging a raised federal reserve to help their stocks continue to increase, another fallback is being foreshadowed in the midst of Trump’s future plans. Many individuals on Wall Street are hopeful that Trump will get his legislative agenda passed through Congress in order to balance out their trading rate, the price at which stocks are bought or sold at a given time, which has multiplied nearly 17.7 times the projected profits through the end of 2017.

Not only has the Dow raised a record number of points, but the S&P 500, or the Standard and Poor’s 500 Index, surged to heights that haven’t been reached in nearly a decade. This theory is simply a way to determine how the stock market itself is doing by providing a weighted index of investments and returns.

For now, Wall Street cautiously awaits Congressional implementation of Trump’s campaign promises. While the month of March may have been the pot of gold at the end of the rainbow that Trump supporters expected, only time will tell if Easter will also bring a hidden basket of investment gems.