Market Insider

Stocks still set to rock as this group jumps on the Trump rally

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Siegel: Market has not fully discounted all favorable future events

The Dow burst through 20,000 after just a two-month, 1,000-point ride, and strategists say stocks could continue to move up for now, as retail investors are lured in.

"Individual investors have started buying again, really since the election," said Jeff Kleintop, global investment strategist at Charles Schwab. "A psychological number like 20,000 helps to continue that trend, helps to bring in investors that have been sitting in cash, and it really helps to keep the money flow coming in. We see this as a positive year, largely because of the individual investor and not just corporations buying back stock any more." Kleintop added he sees modest gains for the market this year. The Dow crossed 19,000 for the first time on Nov. 22, and big, round numbers are viewed as magnets for investors who feel like they missed out on the rally. The fact that individual investors are jumping in is sometimes viewed as a contrarian indicator, a sign that a top is near, but analysts say that the market rally appears to be strong and should continue even if there are pullbacks.


Kleintop also said the market began its run before the election. "I think this really has been more about cyclical upturn in the U.S. economy irrespective of Trump," said Kleintop, who is chief global investment strategist.

"We could easily see 10 percent or more this year," said Wharton Professor Jeremy Siegel on "Closing Bell." He said President Donald Trump's promise of less regulation and lower taxes is helping fuel the rally.

Scott Redler, partner with T3Live.com, follows the market's short-term technical trends, and he says the positive action around 20,000 has been constructive. He also said the 20,000 level could act as a magnet for individual investors who feel like they've been left out.

"I think there have been a ton of bullish undertones while we just consolidated in six to seven week range, after the big post election move," he said in a note. Redler said the market saw a lot of participation from different sectors. "In a bad market, break outs are sold. Not bought."