Dow Jones Reaches New Record High

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Dow Jones and FTSE climb to new highs

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New York’s Dow Jones share index set a new all-time high on Tuesday, while London’s FTSE 100 closed at it highest level in five years.

The rallies mean the stock markets are returning to levels not seen since before the global financial crisis.

The Dow reached 14,285 during the day, exceeding the previous record intra-day high of 14,198, set in October 2007.

It closed slightly lower at 14,256. The FTSE closed at 6,432, its highest close since January 2008.

The recovery suggests investors are regaining confidence in the US and world economies following the financial crisis and global recessions of recent years.

The Dow has more than doubled in value since it plummeted to less than 6,550 points in the depth of the crisis in March 2009, while the FTSE has risen by 68% from its 2009 low.

The US’s other closely-watched index, the S&P 500, also ended the day just short of its pre-crisis high, having gained 125% since 2009.

Returning confidence

Dow Jones Industrial Average

  • Founded in 1896 by Wall Street Journal editor Charles Dow.
  • Now one of the most closely watched share indices in the US, alongside the broader S&P 500 and the tech-heavy Nasdaq
  • Comprised of 30 major US companies including Coca- Cola, Microsoft, Wal-Mart and General Electric.
  • Around two-thirds of listed companies are manufacturers of industrial or consumer goods.

Investors have been encouraged by signs of recovery in the US housing market in recent months, a return of consumer confidence, and signs that big businesses are beginning to invest in capital spending and hire more staff.

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“Key data is turning supportive. Companies are ready to re-invest and grow profitably. With luck, we will see a recovery take hold in the second half of the year,” said Paul Atkinson, head of North American equities at Aberdeen Asset Management.

“The question now is whether we are seeing a stealth rally in danger of running its course… or whether we have the conditions for further market gains.”

The most recent US data, released on Tuesday, suggested non-manufacturing industries, which account for about 90% of the economy, continued to expand last month.

The Institute for Supply Management said its services index rose to 56 in February from 55.2 in January – its highest level in a year.

In the UK, strong corporate earnings have pushed the market up, with mining and banking shares leading.

QE staying

Investors in both the US and the UK have also been reassured by signals that central banks are committed to continuing their economic stimulus programmes, which investors see as essential to the recovery of global economies.

These measures have had the effect of driving down the returns on government debt, making other assets, such as shares, more attractive.

The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick with low interest rates and quantitative easing programmes at meetings this week.

On Monday US Federal Reserve officials gave assurances that they would press on with the central bank’s QE programme, in which it spends $85bn (£56bn) a month on buying bonds.

But some investors also warn that both the UK and US recoveries remain sluggish, while growth in China has also slowed slightly, and the eurozone remains mired in recession.

“What happens when this [QE programme] kind of evaporates or goes away, that’s the major question in the back of my mind,” said Anthony Conroy, head trader at US brokerage BNY Convergex.

“But right now, the economy, the market, everything looks fairly healthy. Stocks still look fairly inexpensive.”

How Long Before The Dow Jones Industrial Average Reaches 21,000?

Has there ever been this much bullishness in equity markets? The reflationary trade has pushed US and UK stock markets to fresh highs, with the Dow Jones, S&P 500, Nasdaq, FTSE 100 and FTSE 250 all notching up new records today despite the renewed prospect of an interest rate hike in the US next month.

The Dow Jones Industrial Average (DJIA) breached 20,000 for the first time on January 25. And, after fading at the end of last month it would appear to have now broken free. But what’s next for the index?

Neil Wilson, a market strategist at brokerage ETX Capital in London, said back then in late January that it would “not be long” before a level of 21,000 was in sight. He was not far wrong.

Today the major U.S. blue-chip index just needed to rise a little over 2% to reach that level. At 12.04pm EST this Wednesday the index was up 78.22 (+0.38%) at 20,582.63 points. Compared to this time one year ago – when it stood at 16,196.41 on February 16, 2020 – it is up a tad over 27% over that time and an impressive 4,386.22 points to the good.

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People walk by the New York Stock Exchange (NYSE) early this February. (Photo by Spencer Platt/Getty . [+] Images).

The prospect of higher rates being announced by the Federal Reserve Open Markets Committee (FOMC), which convenes its next meeting on March 14-15 and will include a Summary of Economic Projections and a press conference by the Chair, and loosening of bank regulation means financials will likely continue to lead the assault.

“The odds of the Fed hiking rates again in March improved after inflation accelerated to a five-year high of 2.5% and retail sales smashed expectations,” said Wilson at the FCA-regulated brokerage in The City of London.

He added: “The data points to interest rates rising sooner rather than later as we see signs the US economy is getting hot. Fed chair Janet Yellen’s testimony in Congress is further fuelling expectations that we are back on for March and the market is pricing in a roughly 40% chance [of a hike].”

In remarks this week (February 14/15) before the Committee on Banking, Housing and Urban Affairs in Washington, D.C., Yellen noted that since her appearance before the Committee in June last year, that the US economy has continued to make progress toward the Fed’s “dual-mandate objectives of maximum employment and price stability.”

In the labor market, job gains averaged 190,000 per month over the second half of 2020, and the number of jobs rose an additional 227,000 in January. These gains brought the total increase in employment since its trough in early 2020 to nearly 16 million.

Additionally, the unemployment rate, which stood at 4.8% this January, is more than 5 percentage points lower than where it stood at its peak in 2020 and “now in line with the median of the Federal Open Market Committee (FOMC) participants’ estimates of its longer-run normal level.”

In relation to monetary policy, Yellen stated in her closing comments: “The economic outlook is uncertain, and monetary policy is not on a pre-set course. FOMC participants will adjust their assessments of the appropriate path for the Federal funds rate in response to changes to the economic outlook and associated risks as informed by incoming data.”

Trump’s Tax Talk Cranks Dow Higher

But remember too that the market had been waiting to see what Donald Trump’s tax and spending plans were comprised of. This has the potential to do some serious disruption and send equities soaring again, led by banks and cyclicals, while also fuelling further gains for the US dollar off the back of anticipated rate hikes.

Bang on cue, and no doubt with an “eye to outshine” Yellen according to Wilson, Trump offered a tantalizing foretaste of planned tax reforms that sent the Dow soaring to new record highs today as the London market came to a close.

The DJIA bounced off the 20,604 level after the US President stated that he will greatly reduce taxes. Markets are taking this as the fodder they need for a fresh pop higher in equities.

“He was short on details but based on what we’ve seen so far from this radical president there is no reason to think that the tax plans will be anything less than a major shift in US fiscal policy,” Wilson remarked. “Major pro-business tax reform has been on the cards but today’s comments reiterate his intentions.”

The gains today on the Dow are not quite so spectacular as attention was on Yellen’s testimony, but the US blue-chip index is being led higher by Procter & Gamble, which rose more than 3% to $90.65 at 2.02pm in New York after activist investor Nelson Pelz took a $3 billion stake in the firm.

On the FTSE 100 in London, the heavy lifting was being done by the banks, which are rising on the prospect of global interest rates moving higher. Ahead of earnings from the ‘Big 5’ banks next week, investors are showing plenty of bullishness around the sector.

Barclays and HSBC have both been on a tear since Brexit and there is even a touch more optimism around embattled Royal Bank of Scotland (RBS) of late as it starts to see some light at the end of a very long and dark tunnel. Conduct charges and fines are eating up less of banks’ profits now and with reflation the name of the game the outlook seems to be improving.

A word of caution though for investors. The strong performance of US equities in recent weeks has brought comparisons to the ‘melt-up’ in 1999. A melt up is a sudden jump in the market resulting from investors rushing in as they fear missing out on a big rally.

Some like Dr Wallace Wormley, Harvard Ph.D.-educated and founder of private investment consultancy OSPARA that provides a range of investment consulting solutions to institutional clients and family offices, recently noted that this was a speculative increase in asset prices and unhealthy since it leaves the market “vulnerable to sharp downdrafts.” It might well be a case of irrational exuberance.

Peter Nigro, Professor and Chair of the Finance Department at Bryant University (Smithfield, R.I), said at the back end of last year that it was “somewhat impossible” to truly predict how markets will settle into a Trump presidency given the ambiguity of some of his positions.

In terms of the number of rate hikes Nigro said this will depend on the “economic tea leaves” before the FOMC’s meetings.

That said, prior to the last hike, Nigro, who trained as a labor economist and worked in Washington, D.C. at the Office of the Comptroller of the Currency (a bureau of the US Department of the Treasury), had been expecting two to three 25 basis points (bps) interest rate rises over 2020. After the FOMC meeting scheduled for this March the market will have to wait until May 2-3 for the committee to convene again.

Banks clearly like less regulation and would like to see at least some parts of the Dodd-Frank Act go away, which Trump slammed as a “disaster” late this January and vowed to “do a big number” on it soon. Dodd-Frank was enacted back in 2020 as President Obama administration’s response to the worst financial crisis since the Great Depression and to prevent the banks making the same mistakes they made around decade ago.

The Dow was trading at 1.51pm today just shy of 20,600 at – up 0.42% (+85.57 points). While the bulls tried very hard to push the FTSE in London to a record close at the death, it fell just short. As to whether the Dow can push up towards 21,000 and beyond remains to be seen in the coming days and weeks. But it can’t be discounted although caveat emptor might be the byword.

Global Stocks Rise, Dow Jones Reaching New Record Levels

Bank of England Governor Mark Carney sparked the Pound lower yesterday. ECB President Mario Draghi will be speaking today. The China National Congress began this morning. President Trump continues to talk tax reform.

Trump Offers Christmas Gift, Dow Jones Industrials Near 23,000

Tax reform remained a focal point via the White House on Tuesday, as President Trump declared it will be a nice Christmas gift for U.S consumers. The Dow Jones responded with slight gains and will open just below the 23,000 level today. Housing sector data will come from the States today with Building Permits and Housing Starts figures. The U.S Dollar continues to range trade in forex.

Cautious Gains on Asian Exchanges, Important Data from China Tomorrow

China opened its National Congress this morning. The Shanghai Shenzhen composite has responded with cautious gains. And the Nikkei Index has displayed tentative buying also from Japan. The Yen has been slightly weaker the past day, but remains in a tight range against the U.S Dollar, as it trades near the 112.25 level. Tomorrow Trade Balance numbers will come from Japan and growth data will come from China.

Transitory Inflation Sighted by Carney, Draghi Speaking This Morning

With the use of the word ‘transitory’, Bank of England Governor sent the Pound lower against the U.S Dollar yesterday. Carney stated he believes the higher inflation being experienced in the U.K will slow down. This signaled to investors the Bank of England is likely not considering more than one interest rate hike in the immediate future. Today employment data will come from the U.K, and European Central Bank President Draghi will be speaking this morning.

Crude Oil Showing Strength, Middle-East Concerning Helping Oil

Crude Oil has shown signs of strength early this week and was able to put in additional gains yesterday. Crude Oil is above 52.00 U.S Dollars a barrel. The commodity may be getting important psychological support because of geo-political concerns emanating from the Middle-East. Crude Oil Inventories data will come from the States today.

More U.K. Inflation Numbers from Britain, Housing Sector Data from States

The Average Earnings Index results from the U.K will be looked over carefully by traders upon its release.

  • 8:30 AM GMT U.K., Average Earnings Index
  • 12:30 PM GMT U.S., Building Permits
  • 18:00 PM GMT U.S., Federal Reserve’s Beige Book

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

How Long Before The Dow Jones Industrial Average Reaches 21,000?

Has there ever been this much bullishness in equity markets? The reflationary trade has pushed US and UK stock markets to fresh highs, with the Dow Jones, S&P 500, Nasdaq, FTSE 100 and FTSE 250 all notching up new records today despite the renewed prospect of an interest rate hike in the US next month.

The Dow Jones Industrial Average (DJIA) breached 20,000 for the first time on January 25. And, after fading at the end of last month it would appear to have now broken free. But what’s next for the index?

Neil Wilson, a market strategist at brokerage ETX Capital in London, said back then in late January that it would “not be long” before a level of 21,000 was in sight. He was not far wrong.

Today the major U.S. blue-chip index just needed to rise a little over 2% to reach that level. At 12.04pm EST this Wednesday the index was up 78.22 (+0.38%) at 20,582.63 points. Compared to this time one year ago – when it stood at 16,196.41 on February 16, 2020 – it is up a tad over 27% over that time and an impressive 4,386.22 points to the good.

Covid-19 Virus Affect On The Stamp Market

U.S. MoneyStamps: 50 Best Buys

Korea MoneyStamps

People walk by the New York Stock Exchange (NYSE) early this February. (Photo by Spencer Platt/Getty . [+] Images).

The prospect of higher rates being announced by the Federal Reserve Open Markets Committee (FOMC), which convenes its next meeting on March 14-15 and will include a Summary of Economic Projections and a press conference by the Chair, and loosening of bank regulation means financials will likely continue to lead the assault.

“The odds of the Fed hiking rates again in March improved after inflation accelerated to a five-year high of 2.5% and retail sales smashed expectations,” said Wilson at the FCA-regulated brokerage in The City of London.

He added: “The data points to interest rates rising sooner rather than later as we see signs the US economy is getting hot. Fed chair Janet Yellen’s testimony in Congress is further fuelling expectations that we are back on for March and the market is pricing in a roughly 40% chance [of a hike].”

In remarks this week (February 14/15) before the Committee on Banking, Housing and Urban Affairs in Washington, D.C., Yellen noted that since her appearance before the Committee in June last year, that the US economy has continued to make progress toward the Fed’s “dual-mandate objectives of maximum employment and price stability.”

In the labor market, job gains averaged 190,000 per month over the second half of 2020, and the number of jobs rose an additional 227,000 in January. These gains brought the total increase in employment since its trough in early 2020 to nearly 16 million.

Additionally, the unemployment rate, which stood at 4.8% this January, is more than 5 percentage points lower than where it stood at its peak in 2020 and “now in line with the median of the Federal Open Market Committee (FOMC) participants’ estimates of its longer-run normal level.”

In relation to monetary policy, Yellen stated in her closing comments: “The economic outlook is uncertain, and monetary policy is not on a pre-set course. FOMC participants will adjust their assessments of the appropriate path for the Federal funds rate in response to changes to the economic outlook and associated risks as informed by incoming data.”

Trump’s Tax Talk Cranks Dow Higher

But remember too that the market had been waiting to see what Donald Trump’s tax and spending plans were comprised of. This has the potential to do some serious disruption and send equities soaring again, led by banks and cyclicals, while also fuelling further gains for the US dollar off the back of anticipated rate hikes.

Bang on cue, and no doubt with an “eye to outshine” Yellen according to Wilson, Trump offered a tantalizing foretaste of planned tax reforms that sent the Dow soaring to new record highs today as the London market came to a close.

The DJIA bounced off the 20,604 level after the US President stated that he will greatly reduce taxes. Markets are taking this as the fodder they need for a fresh pop higher in equities.

“He was short on details but based on what we’ve seen so far from this radical president there is no reason to think that the tax plans will be anything less than a major shift in US fiscal policy,” Wilson remarked. “Major pro-business tax reform has been on the cards but today’s comments reiterate his intentions.”

The gains today on the Dow are not quite so spectacular as attention was on Yellen’s testimony, but the US blue-chip index is being led higher by Procter & Gamble, which rose more than 3% to $90.65 at 2.02pm in New York after activist investor Nelson Pelz took a $3 billion stake in the firm.

On the FTSE 100 in London, the heavy lifting was being done by the banks, which are rising on the prospect of global interest rates moving higher. Ahead of earnings from the ‘Big 5’ banks next week, investors are showing plenty of bullishness around the sector.

Barclays and HSBC have both been on a tear since Brexit and there is even a touch more optimism around embattled Royal Bank of Scotland (RBS) of late as it starts to see some light at the end of a very long and dark tunnel. Conduct charges and fines are eating up less of banks’ profits now and with reflation the name of the game the outlook seems to be improving.

A word of caution though for investors. The strong performance of US equities in recent weeks has brought comparisons to the ‘melt-up’ in 1999. A melt up is a sudden jump in the market resulting from investors rushing in as they fear missing out on a big rally.

Some like Dr Wallace Wormley, Harvard Ph.D.-educated and founder of private investment consultancy OSPARA that provides a range of investment consulting solutions to institutional clients and family offices, recently noted that this was a speculative increase in asset prices and unhealthy since it leaves the market “vulnerable to sharp downdrafts.” It might well be a case of irrational exuberance.

Peter Nigro, Professor and Chair of the Finance Department at Bryant University (Smithfield, R.I), said at the back end of last year that it was “somewhat impossible” to truly predict how markets will settle into a Trump presidency given the ambiguity of some of his positions.

In terms of the number of rate hikes Nigro said this will depend on the “economic tea leaves” before the FOMC’s meetings.

That said, prior to the last hike, Nigro, who trained as a labor economist and worked in Washington, D.C. at the Office of the Comptroller of the Currency (a bureau of the US Department of the Treasury), had been expecting two to three 25 basis points (bps) interest rate rises over 2020. After the FOMC meeting scheduled for this March the market will have to wait until May 2-3 for the committee to convene again.

Banks clearly like less regulation and would like to see at least some parts of the Dodd-Frank Act go away, which Trump slammed as a “disaster” late this January and vowed to “do a big number” on it soon. Dodd-Frank was enacted back in 2020 as President Obama administration’s response to the worst financial crisis since the Great Depression and to prevent the banks making the same mistakes they made around decade ago.

The Dow was trading at 1.51pm today just shy of 20,600 at – up 0.42% (+85.57 points). While the bulls tried very hard to push the FTSE in London to a record close at the death, it fell just short. As to whether the Dow can push up towards 21,000 and beyond remains to be seen in the coming days and weeks. But it can’t be discounted although caveat emptor might be the byword.

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