FX.co ★ Dow Jones set to decline as Trump takes office

The recent jump in the Dow Jones index was a temporary event, Northman Trader said in its analytical report. It anticipates that the index will drop in the nearest term as fast as it rose . Market participants had high expectations ahead of the US presidential election, which triggered the rise. But most of these expectations were defeated, so the Dow Jones risks to lose several points.

A robust growth at the beginning of this year cheered markets up, but analysts at Northman Trader believe that the increase is short-lived. The index rally was linked to concerns over economic slowdown in China. To the contrary, the US economy looked healthier and was thought to be merely the only driver of the global growth. That’s why investors favored risky assets. Besides, the US stocks and the greenback gained ground ahead of the presidential election. Thus, the S&P 500 index added 0.8% and ended 2016 with a total profit of 9.5%.

However, some experts say that markets should prepare for the worst case scenario. In fact, things are already getting worse. Thus, the Exxon Mobil and Chevron shares put the Dow Jones Industrial Average under pressure; it pulled away from the 20,000 mark, nearly reached in the previous session.