DOW 20,000 – Practically There
We’ve heard wild tales of the future Dow Jones Industrial Average (DOW). One set of experts working for Calpers (the largest California Pension Fund – for teachers) had based their ability to keep their pension totally moneyed on the DOW being at 28,000 by 2009 and by 2099 at 28,000,000 pts (yes, 28 million) which is simply little bit exuberant by any stretch of the creativity. That naturally, was just prior to the 2008 Financial Crisis (Cite: Wall Street Journal, article; “Dow 28,000,000: The Amazing Expectations of California’s Pension System,” by David Crane, 5-19-2010).
So, as we approach the last days prior to we struck DOW 20 K, and Christmas 2017, apparently, the stars have actually aligned. How did this occur so rapidly, specifically at a time when we were informed that if Hillary Clinton didn’t win the election, our stock markets would tank, turns out all the significant indices are at an all-time high.
Such doom-and-gloom was likewise perpetuated by the mainstream media in Britain right prior to Brexit. What is causing this stock market rally, and the more important question; how long will it last, as we are way overdue for a major correction, really we’ve been past due for well over a year, as many of the major business are trading a PE ratios (price of stock over expected profits) which are at or above the Dot Com Bubble highs. The DOW at that time circa 1999 was just 9,000 points.
So, what brings us to this time? Numerous things, here are a few:
– The Trump Bounce
– The Upward Pattern
– The Flight to Safety
– Low Rates Of Interest
There was an intriguing post in Reuters on December 20, 2016 entitled: “Nasdaq rises to tape, Dow bats eyes at 20,000” by Noel Randewich which specified:
” The Dow and Nasdaq Composite rose to tape highs on Tuesday in a rally sustained by optimism about U.S. President-elect Donald Trump’s policies. U.S. stocks have actually been on a tear because the Nov. 8 governmental election, with the Dow up 9 percent and the S&P 500 getting 6 percent on bets that Trump’s prepare for deregulation and facilities spending will increase the economy “The marketplace is concentrated on the Trump program, which is tax cuts, infrastructure spending and deregulation,” stated Jeff Zipper.”
So, the concern is: what’s next? Well, it appears that Trump’s Economic Strategy could in fact set our GDP inline for a 4% development rate simply as he promised. The FED is fretted about inflation, and have actually currently chosen to action in and raise rates.
Let’s face it decreasing the corporate tax rate will stimulate development, and with development comes small company start-ups and growth. Things are about to get intriguing, and we will have some jitters and variations in the market as the New Regular takes hold. Please consider all this and think on it.
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