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Dow Soars as Trump’s Tax Returns Fail to Dent U.S. Stock Market

Published September 28, 2020 6:26 PM
Francois Aure
Published September 28, 2020 6:26 PM
  • The Dow Jones rallied 1.9% to start the week.
  • If Wall Street was bothered by the release of Donald Trump’s tax returns, it didn’t show.
  • Boeing stock led the Dow 30 with a monster 7% rally.

The Dow Jones rallied over 500 points on Monday, powered by a massive surge in Boeing stock and a weakening U.S. dollar. Donald Trump’s leaked tax returns were no concern for the stock market, as there is little in them Wall Street doesn’t already know.

Dow Jones Soars Despite Trump Tax Leak

All three major U.S. stock market indices rallied, with the Dow Jones, Nasdaq, and S&P 500 climbing over 1%.

Dow Jones, Donald Trump
The Dow Jones surged more than 500 points on Monday. | Source: Yahoo Finance 

With no significant data reports to focus on, the presidential election and Covid-19 are two lingering concerns for the stock market. It would seem that neither is providing much resistance for bulls, however, as Dr. Fauci’s concerns about continually rising U.S. cases  and some theoretically bad news for President Trump failed to hurt risk appetite.

Regarding the pandemic, the fact that deaths remain steady is keeping the risk of wide-reaching lockdowns on the back-foot.

Meanwhile, The New York Times managed to obtain several years of Donald Trump’s tax returns. Watch the video below for an explanation of how the records break down.

Although much was made in the papers of the “$750 in income tax ” headline, Wall Street was calm as Trump’s cavalier approach to debt. Trump’s questionable billionaire status is known to everyone who followed the collapse of his highly leveraged casino in Atlantic City .

The finer points of whether the president’s real estate empire is fully depreciated are unlikely to bother his core supporters, which have proven to be resilient to almost any headline we have seen. Opposing Republicans already tried to use this line of reasoning  to take out Trump when he ran for president in 2016.

Another political consideration that has helped support the U.S. stock market came from Goldman Sachs. A few days ago, the investment bank stressed its belief that a contested election won’t be a major concern. Watch the video below for its reasoning.

Nordea Asset Management: Stock Buying “Automatic” Into Month’s End

Economist Sebastian Galy at Nordea Asset Management maintains a constructive view on U.S. equities despite concern there is more weakness ahead. He told CCN.com:

We remain in a buy on dip mode, but do not believe we have yet reached the bottom. For sure, equity markets are doing better in month-end driven by expectations of month-end rebalancing of portfolios and some optimism (European Banks are rallying). Given that equities had underperformed this month, there is a more or less an automatic need to buy stocks in month-end, except if asset allocators decide that it is better to stay underweight equities.

If Galy is correct, October could bring turbulence for stocks, a view that is quite prevalent in major institutional forecasts.

Dow 30: Boeing Soars on FAA Announcement

Boeing stock was a clear leader in the Dow 30 , as the aerospace giant soared more than 7%. The stock surged on news that the 737 MAX is continuing to inch closer to be approved by the FAA. Steve Dickson, the agency’s Chief, will reportedly apparently fly on the infamous jet next week.

Given how Boeing’s MAX has continually been touted as “too big to fail,” it isn’t surprising that the stock is muddling through. Watch the video below for more insight about the eventual return of the MAX jet.

Other top gainers in the Dow included Dow Inc., which climbed 4%, and Goldman Sachs, which rose 3.5%.

Only a couple of stocks flirted with red figures, as consumer giant Walmart traded flat alongside Merck & Co.