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.”

Dow Jones narrowly misses record high of 20,000

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America’s index of leading stocks came within one point of reaching a record high of 20,000 on Friday before closing at 19,963.80.

The Dow Jones industrial average ended the day up 64.51 points after a brief rally.

Although new data showed that US job creation slowed in December, annual wage growth rose at its quickest pace since June 2009.

Technology stocks propelled the Nasdaq and the broader S&P 500 to new highs.

The S&P 500 closed up 7.8 points to 2,276.98 and the Nasdaq climbed 33.12 points to 5,521.06.

Apple rose 1.1%, helping all three major indexes, after Canada’s Competition Bureau said it did not find sufficient evidence that the iPhone maker had engaged in anti-competitive conduct, closing a two-year investigation into the company.

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.

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