Analysts at Northman Trader forecast decline in the Dow Jones. According to them, the Dow Jones industrial average could fall by several percentage points following Donald Trump’s inauguration.
The Dow Jones is a price-weighted average of 30 significant US stocks. Since first days of 2017, the index has been rising. However, experts claim this is a transitory factor.
Northman Trader said that the strong start of 2017 is the result of the previous year when concerns over the Chinese economy triggered pressure on stock markets worldwide.
A rise in the dollar and US stocks sparked by the US presidential election also contributed to the strong start. The S&P 500 rose by 0.8%, reversing from three consecutive days of decline after elections. As a result, the S&P 500 ended 2016 up 9.5%. The Dow advanced by 132.18 points, while Stoxx Europe 600 gained 0.9%.
The Dow Jones almost hit the important psychological price level of 20,000 on Friday. Analysts believe the index would fall into the red in the short-term.
Disappointing data of some companies comprising the index confirm analysts’ predictions. Thus, falling shares of Exxon Mobil and Chevron contributed to the Dow’s retreat from the 20,000 level.
After Trump’s victory, the index gained almost 9%. Analysts and investors had expected increased volatility, but it turned out to be low.
Earlier this week, the Dow Jones fell by 76 points, or 0.4%, to the level of 19,887. Meanwhile, the S&P 500 fell by 0.4%. This is primarily due to the decline in world oil prices.
