The Dow Finally Joins The Party
Finally, the Dow has arrived to the party. While the S&P 500, Nasdaq and the Rusell have arrived to the party in fashion already, making new all-time highs, the Dow was stuck in traffic. However, this past week, the Dow finally made it to the party, reaching all-time highs as well.
The Dow is up 2.3% this week which is the biggest weekly percentage gain since July. The Dow reaching new all-time highs since Jan. 26 high of 26,616 which was driven by moves in Boeing and Caterpillar. Boeing has gone nowhere for than six months and I even wrote about Caterpillar forming the death cross two months ago.
The Dow joining the party shows it's not just tech stocks, but we are seeing broad-based buying. Financials, Materials and Industrials move the Dow and are up significant over the past month.
"The new highs are being driven mostly by solid economic data," Bell says. "The market seemingly priced in a much more dire situation with regards to tariffs, and given the lower-than-expected tariff rate, the market is moving higher."
The bullish outlook for businesses and consumers has investors again betting on U.S. companies posting strong earnings when the third-quarter profit-reporting season gets underway in early October. Analysts forecast companies in the S&P 500 stock index to grow earnings at a 22 percent clip in the July through September quarter.
Rising interest rates, which historically have been a trigger for market downturns, haven't yet caused investors to fear an economic slowdown. The Federal Reserve, which has raised short-term rates twice this year to a range of 1.75 percent to 2 percent, is almost certain to increase rates another quarter of a percentage point at its Sept. 26 meeting.
However, do you see what I see?
Some of the worst markets declines in history were preceded by low volatility, strong earnings, strong consumer confidence and bullish sentiment.
Let me give you a clue.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
Looks like a double top to me... However, I do suspect earnings to be pretty good. So I expect a melt up in stock prices unless the trade war gets nasty or wage growth finally push inflationary metric higher at an accelerated pace.
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BRAH! Did you just use a microaggressioN!?