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Full Steam Ahead to Dow 20,000 Today

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Wednesday, January 25, 2017

Ahead of this morning’s bell, a major deal has been struck: JPMorgan (JPM - Free Report) has agreed to serve as custodian to over $1 trillion (with a “t”) in BlackRock (BLK - Free Report) assets. This amounts to roughly one-fifth of BlackRock’s total holdings. JPMorgan takes over for State Street Corp. (STT - Free Report) , which had managed these accounts previously.

What’s key about this is that JPMorgan is a Dow component and State Street is not. Immediately following this news, Dow futures shot up over 100 points, implying a market open above that long-coveted Dow 20,000 figure which had, until today, eluded the Trump Rally.

Also, the first week of President Trump in the White House has seen an aggressive array of executive orders, most of which are aligned with pro-growth measures that follow up strongly on Trump’s campaign promises. Currently, whatever obstacles Trump may be encountering toward his objectives look to be effectively steamrolled. Most of this is low-hanging fruit of pro-business philosophy, but the big gains the Trump Rally originally borne look to already be within view.

This, despite a mixed report from Dow component Boeing (BA - Free Report) , in which the aerospace/defense major beat earnings estimates by 13 cents but posted a top-line miss. It’s the fourth earnings beat in the last five quarters, but full-year 2017 revenue projections were curbed to a range of $90.5-92.5 billion, lower than the Zacks consensus estimate of $94.57 billion. We expect analysts to re-address their projections for this Zacks Rank #3 Hold) stock with a Zacks Style Score of A overall.

Another Dow component, United Technologies (UTX - Free Report) , also reported Q4 results before the bell. The industrial conglomerate matched the Zacks consensus estimate of $1.56 per share on better-than-expected revenues of $14.66 billion. Shares dipped slightly in the pre-market, but UTX looks to be on track with its initiatives projected out to year 2020. The company is also a Zacks Rank #3, but with a Zacks Style Score of D.

Mark Vickery
Senior Editor

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