Is the stock market entering a 'show me' phase?

Is the stock market entering a 'show me' phase?

Gordon Charlop, left, works with fellow traders on the floor of the New York Stock Exchange, Tuesday, Jan. 3, 2017. (AP Photo/Richard Drew))

The Dow's flirtation with, but inability (so far) to reach the 20,000 level may be further evidence of a sentiment shift. Despite coming within 13 points of that milestone on Dec. 20, it has been unable to break through the barrier as investors look for concrete signs that the good news they've priced in since Election Day is coming. The Dow was down 64 points Thursday afternoon to 19,878.

“The market should be settling into more of a ‘delivering the goods’ (mentality). The market is also likely awaiting the actual proposals for corporate and perhaps personal tax reform” once Trump is sworn in as president on Jan. 20, says Bill Stone, chief investment strategist at PNC Asset Management Group.

Instead of looking forward to Trump's post- inauguration moves as they have been since the billionaire businessman won the White House, investors on Thursday were once again focused on economic data and other market forces. Retail stocks were under pressure after department stores Macy's and Kohl's reported weak holiday sales. But offsetting the gloom in retail land was a solid reading on the performance of the services sector of the economy in December and a steep drop last week in the number of Americans signing up for first-time unemployment benefits.

But not everyone is convinced that investors have set aside the Trump-infused glee.

“I don’t think the market has suddenly become sensible and started to look for hard evidence,” says Michael Farr, president of money management firm Farr Miller & Washington. “This market is still about buying the feel-good. While tax cuts, infrastructure spending, and regulatory reform may be the perfect formula for real growth, change is months from getting through Congress and over a year away from appearing in economic data. There will be time for ‘wait and see,’ but it doesn’t feel like we are there yet.”



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