DOW Jones back close to 22000 levels – but for how long this time?

The Dow Jones Industrial Average on Friday 1st September moved to just under 22000, but only just. It closed at: 21987 but with intra day highs above 22000. The NASDAQ closed at a record high of: 6435

Tax reforms Donald Trump promised during his election campaign are back on the agenda. But just how much he can get through congress and at what level will likely dictate the next major DOW move.

US Tax Agenda

I assume if Mr Trump gets all he wants including lowering corporation tax and easing the tax system complexities and burden for US citizens – the markets will offer rewards. But if he can’t get this through or only at reduced levels then we are likely to see the markets react negatively. Donald Trump also wants to announce BIG plans for infrastructure spending. This is without the looming problem of the US debt ceiling that needs serious attention and Trumps threat to shut down government if he doesn’t get what he wants!

World Tension

North Korea and US tensions are not far away as we have seen again with the North Korea reporting a successful nuclear test over the weekend. This will play on investors attitude to risk eventually. These problems can’t be ignored by the markets even if the markets appear to doubt the likelihood of nuclear war!

I can’t believe I’m writing this. Just thinking about these possibilities are so dreadful. As much as I abhor the prospect of war, any war – the chance of nuclear war scares the hell out of me! I am simply trying to analyse and offer an unbiased opinion on how this may affect the markets. This is not good!

There is a volatile cocktail for the US markets (and globally) to navigate. I’m not so convinced this tightrope walk will end well.

More on this later…