Dow tops 25,000 on strong private hiring, global growth hopes

[mahatmakanejeeves]

Last edited Mon Feb 5, 2018, 05:42 PM - Edit history (3)

Source: Reuters

JANUARY 4, 2018 / 7:37 AM / UPDATED 9 MINUTES AGO

Dow tops 25,000 on strong private hiring, global growth hopes

Sruthi Shankar 4 MIN READ

(Reuters) - The Dow Jones Industrial Average broke above the 25,000 level for the first time on Thursday and other major indexes scaled new highs after strong U.S. private jobs data added to upbeat sentiment following indications of robust growth globally.

The 30-member blue-chip index crossed five 1,000-point marks in 2017, driven partly by President Donald Trumps pro-growth agenda and solid corporate earnings.

The momentum carried into 2018, with the benchmark S&P index closing above 2,700 for the first time on Wednesday and the Nasdaq settling above 7,000 a day earlier.

Every 1,000-point increment in the Dow is becoming less of a percent move. Its just another milestone, said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee. ... The point that people need to take is that the macro indicators are telling investors that world economies are doing really well.

Read more: https://www.reuters.com/article/us-usa-stocks/dow-tops-25000-on-strong-private-hiring-global-growth-hopes-idUSKBN1ET1CJ

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I know; it's much less important than people make it out to be. It will be touted endlessly at today's WH press briefing anyway, to the exclusion of all other events.

Here's why it's not that big a deal:

This is why they invented logarithms. Well, not really, but....
https://www.democraticunderground.com/100210010120#post1

To choose numbers at random, suppose the Dow Jones Industrial Average opens one year at 700 points. During the year, it goes up 700 points. It ends the year at 1,400 points.

Suppose it starts another year at 10,000. It goes up 5,000 points. That's seven times the increase of that other year!

Except it isn't.

Going from 700 points to 1,400 points is a bigger percentage increase - which is what counts - than going from 10,000 points to 15,000 points.

In the first example, the average doubled. It increased 100 percent. In the second example, the average increased only 50 percent.

This kind of boasting is for fools.
The actual value of this "event" for people who make steady investments in an IRA or a 401(k) is exactly zero.

[n2doc]

1. Frothy n/t

[heaven05]

2. distraction

and diversion....8 dollar an hour jobs and the lucky and the FEW are the only people benefiting from this 'gain'.

[brooklynite]

15. What about those Union pension funds?

[heaven05]

19. I don't

Expect mine to survive the greed and avarice of these snakes in office...nor my VA...Medicare OR Social Security...and I'll have lots of company in trumpers losing and the whiny idiots who sat out the vote losing...I will fiddle while laughing derisively at any trumper fool or whiny that complains

[samnsara]

3. our stocks are doing very well...hubby calls it ill gotten gains

...but its a gob of $$. We just hang on to it and it will go down again.

[mahatmakanejeeves]

4. U.S. STOCK MARKET RETURNS: S&P 500 BY PRESIDENT:

I haven't checked the numbers.

Hat tip, commenter "Boreal" at Joe.My.God: Trump Takes Credit For Dialogue Between Koreas

U.S. STOCK MARKET RETURNS: S&P 500 BY PRESIDENT:

■FDR (D): 300.95%
■OBAMA (D): 233.71%
■IKE (R): 217.15%
■TRUMAN (D): 207.98%
■CLINTON (D): 163.25%
■LBJ (D): 73.17%
■BUSH 41 (R): 73.13%
■CARTER (D): 59.33%
■FORD (R): 42 53%
■JFK (D): 30.42%
■TRUMP (R): 13.64%

Link to tweet

Retweeted by Jeff Gauvin: https://twitter.com/JeffersonObama

increase in Dow Jones Industrial Average from:
--Trump inauguration to Jan 4 of 2nd year: 26%
--Obama inauguration to Jan 4 of 2nd year: 33%

Link to tweet

[Tobin S.]

10. The S&P 500 numbers in the chart are inaccurate.

The S&P 500 grew by 20.49% in 2017. Those numbers for all the presidents except for Trump are for the entire time that they were in office. In FDR's case that would be over 12 years- Obama 8 years, Clinton 8 years. We're just looking at one year for Trump.

However, what the chart assumes is that presidents have a lot to do with the economy. In my view, that's not normally the case unless the circumstances are unusual like the recovery from the Great Depression (FDR) and the Great Recession (Obama). Tax policy is probably the most influence on the economy a president can have under ordinary circumstances. The market has responded well to Trump's tax policy. Naturally, if you give corporations about a 40% tax cut they're going to be very happy. Whether that policy plays out with long term gains in the economy is yet to be seen, and has much more to do with the performance of companies than anything Trump will do.

[Javaman]

5. went to see my financial manager last week before the holiday...

publicly, brokers are cheering the streak, privately, they are freaking the fuck out.

All are waiting for the "correction".

[mahatmakanejeeves]

7. I'm waiting for the bell to ring at the top. Then I'll know it's time to move into some cash. NT

[Yupster]

17. You don't have to let everything ride

You can always take a chip or two off the table.

[Javaman]

18. My days of playing the market have long since past.

it just came up in a general discussion.

[Bengus81]

6. BS...flying high on nothing but AIR. Watch for the crash...in the fall,in the south.

The first HINT that Wall St. gets that the phony tax cut hasn't created one extra job and the debt will be much worse than 1.5T in TEN years it will drop 500 points in a day. This SHAM is just like 1928/1929.

[mahatmakanejeeves]

8. 500 points out of 25,000 isn't that much. 1929 was ... (looking) ...

much more, in percentage.

Wall Street Crash of 1929 Timeline

....
On September 20, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery. The London crash greatly weakened the optimism of American investment in markets overseas. In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.

Selling intensified in mid-October. On October 24 ("Black Thursday" ), the market lost 11 percent of its value at the opening bell on very heavy trading. The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, so investors had no idea what most stocks were actually trading for at that moment, increasing panic. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.

With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to one that ended the Panic of 1907. It succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. The rally continued on Friday, October 25, and the half day session on Saturday the 26th but, unlike 1907, the respite was only temporary.

Over the weekend, the events were covered by the newspapers across the United States. On October 28, "Black Monday", more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 13%.

The next day, "Black Tuesday", October 29, 1929, about 16 million shares traded as the panic selling reached its peak. Some stocks actually had no buyers at any price that day ("air pockets" ). The Dow lost an additional 30 points, or 12 percent. The volume of stocks traded on October 29, 1929, was a record that was not broken for nearly 40 years.

On October 29, William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks to demonstrate to the public their confidence in the market, but their efforts failed to stop the large decline in prices. Due to the massive volume of stocks traded that day, the ticker did not stop running until about 7:45 p.m. The market had lost over $30 billion in the space of two days which included $14 billion on October 29 alone.

Dow Jones Industrial Average on Black Monday and Black Tuesday
Date Change % Change Close
October 28, 1929 −38.33 −12.82 260.64
October 29, 1929 −30.57 −11.73 230.07

After a one-day recovery on October 30, where the Dow regained an additional 28.40 points, or 12 percent, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60. The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28, and reaching a secondary closing peak (i.e., bear market rally) of 294.07 on April 17, 1930. The following year, the Dow embarked on another, much longer, steady slide from April 1931 to July 8, 1932, when it closed at 41.22—its lowest level of the 20th century, concluding an 89 percent loss rate for all of the market's stocks. For most of the 1930s, the Dow began slowly to regain the ground it lost during the 1929 crash and the three years following it, beginning on March 15, 1933, with the largest percentage increase of 15.34 percent, with the Dow Jones closing at 62.10, with an 8.26 point increase. The largest percentage increases of the Dow Jones occurred during the early and mid-1930s. In late 1937, there was a sharp dip in the stock market, but prices held well above the 1932 lows. The market would not return to the peak closing of September 3, 1929, until November 23, 1954.

[Bengus81]

11. Yeah...except it's never a one day event,just like in 1928/29

So yeah...500 points would be a shock but not an end all but it won't stop there.

[Yavin4]

9. All of which means that interest rates will go up four times this year.

I'm finally getting a decent rate of return on my savings.

[D_Master81]

12. that 2nd part helps

I thought the US was coming out of the recession faster than overseas markets and every time one of those markets would hiccup under Obama our market would go down too. I remember a couple of times where Euro or Chinese markets would be struggling and for some reason our stock market would start declining. Probably a big reason for the increases is 1) execs buying back in and 2) people seeing the market going up so the casual investor is throwing money in as well. Once the correction happen you'll see these investors flee, making the correction worse than it needs to be. I think that was partly why the market fell so much in 2008/09. The market at the time had hit all time highs then hit a major downturn, but not something that should've led to a 60% fall.

[Maggiemayhem]

13. All bubbles will eventually burst

[TheFrenchRazor]

14. pyramid scheme. nt

[brooklynite]

16. I bought my Apple stock at an effective price of 65c a share...

...it wasn't "gambling" and it wasn't insider trading. I had the foresight to see that they would make products people would want to buy.

Complain if you want to that not everyone can invest in the market, or that market performance isn't reflective of the economy as a whole. But lazy throw-away lines like "pyramid scheme" (especially when never supported by an argument) are tiring.