DOW Hits Major Mark for First Time in History
The Dow Jones Industrial Average blew through the 25,000 point mark for the first time in its 121-year history in early trading on Thursday.
If the Dow stays above 25,000 at closing, it will mark the shortest stretch between 1,000 point milestones ever, at just 23 days, according to Fox Business Network.
The market is being bolstered by early jobs numbers released by the payroll company ADP showing the economy added 250,000 jobs in December.
CNN Money reported, “The U.S. economy is very healthy, especially compared with the slow recovery from the Great Recession. Unemployment hasn’t been this low in 17 years. Economic growth is the best in three years. Equally important, most major world economies are growing at the same time for the first time in several years.”
“Thanks to those economic gains, corporate profits have never been higher. Companies are sitting on record amounts of cash, a chunk of which is being returned to shareholders. That makes stocks more attractive,” the news outlet added.
“Unlike the bull market that ended in 2000, this one has earnings behind it,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, in reference to the so-called dot-com bubble that was built on illusory profits. “The fundamentals are good. The economy is strong.”
The stock market run began the day after Trump was elected in November 2016, when the Dow rose 250 points to hit a record high of 18,589.
Throughout 2017, the Dow broke through the 19,000, 20,000, 21,000, 22,000, 23,000, 24,000 marks for the first time in its history. That represents a 36 percent rise in value, or over $5.5 trillion.
With the passage of the Republican tax reform bill last month, market watchers anticipate the Dow will rise even higher.
“I expect this stock market to continue rising for as far as the eye can see. So I am very bullish,” former Reagan top economic adviser Art Laffer told Fox News last month.
FNC host Bill Hemmer followed up wondering, given how much the market has already risen, “How do you find more room to run?”
The Dow in August 1982 was 777 that was its low just before the tax cuts (passed under Reagan in 1981) took effect,” Laffer said. “By the end of Reagan’s term, I don’t know what it was three-and-a-half (times)…It was way, way up. So we have lots and lots of room.”
The DJIA was 2,239 the day Reagan left office in Jan. 1989, or nearly a three times rise in value.
Laffer believes the market could go up to 30,000 under Trump.
“The Dow hasn’t doubled since Trump has been in office,” Laffer stated. “If it went up threefold, it would be more like happened with Reagan. It’s not even close to that growth.”
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