Tag Archives: Dow

Stocks Finish Strong in the US

Stocks Finish Strong in the US

All three major indices finished superbly by the end of trading on Friday and had one of the best weeks of the year overall. The Dow, S&P 500 and Nasdaq ascended substantially, will all three seeing increases between 2.1 and 2.8 per cent. Dow and Nasdaq were both nearing record highs on Thursday although there was no major facilitator to cause the soar. It seems that investors are expecting the stocks to reach new highs in the coming weeks and therefore continue to trust in the bull market’s sustainability. Friday’s momentary sell-off was due to worse-than-expected data, but did not impact hugely the largely successful week of strong performance by the three major indexes.

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Manufacturing Rallies

Manufacturing Rallies?

The recent index rally in the US has inspired many to applaud FED chairman Ben Bernanke for his pro-market fiscal policies. Peter Schiff, the CEO of Euro Pacific Capital points out in his recent article that market performance “is now almost completely correlated to Fed activism”. Indeed, market rallies, as with S&P 500 and Dow Jones, tell us more about investor confidence and very little about actual economic health of country and the companies listed in these indexes. Schiff argues that all recent market rallies are preceded by fresh stimulants from the FED and thus the markets fall when the stimulus tab runs dry.

For the investor, it’s imperative to know which variables to look at before investing. If Schiff is correct, markets will surge after Bernanke’s next decision to stimulate the economy. In other words, a case can be made that the rallies we are currently witnessing are largely artificial. Stock-investing is a powerful and historically efficient tool to boost the economy, but if Schiff is right, the only this investors are boosting is a big fat bubble - wholly dependent on the government’s economic policies.

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Dow, S&P hit record highs

Dow, S&P hit record highs

The two major US indexes closed on a record high on Tuesday, largely spurred by positive developments in the health care sector. The Dow closed at 14.662 and S&P 500 hit a record high of 1.570. The Dow has experienced a Phoenix-like ascendance from the ashes, but some investors worry that the market rally is simply a sign of the coming storm. Many also speculate that the strongly performing indices are not indicative of a healthy economy and that the two entities operate on a different set of rules. Nevertheless, the US economy has shown signs of improvement, although the recovery has been slower than any previous post-recession recovery.

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A Rally Before The Storm?

A Rally Before The Storm?

The S&P 500 finished lower on Tuesday, bringing the winning streak of gains to an end as investors moved away from technology, but the Dow managed to pull some gains and thus end at yet another record high. The Dow also hit a record high, while the S&P 500 is approaching its own high of 1,565.15, from October 9, 2007. The market’s surge recently has pushed the Dow up 10.3 per cent for the year and boosted the S&P 500 by 8.9 per cent for 2013 until now. Signs of improvement in the economy and the Fed’s quantitative easing policies might indicate a better future, but one economist, Steve Keen, believes that the US stock market is a massive bubble. “Nothing can accelerate forever. At some point the acceleration stops, and when it does the market breaks,” Keen told The Daily Ticker.

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Market Madness

Market Madness

Markets are performing well, US stock indices are shooting higher, euro is stable and the yen is looking sturdier by the day. Are positive developments in the market an indication that the US, eurozone and Japan are recovering from their respective financial crises or do markets have a life of their own, irrespective of a country’s economic health?

The positive employment news coming out of the US would lead one to assume that things are fine and dandy in the largest economy in the world. However, as Stephen Gandel points out, the number of jobs added in February should have been 13 per cent than the actual number reported. In fact, if the economy correlated with the market, the number of jobs should have been 150,000 higher.

The S&P, Dow and Nasdaq jumped on the news of seemingly good jobs numbers. However, would anyone honestly claim that the US is doing well? Trading on the news is not necessarily a good strategy because markets don’t always react in a rational manner.

For instance, markets have largely ignored Italy – except for a brief moment after the election – where Beppe Grillo is about to claim a prominent role. Why would the euro stay steady when a man who has vowed to take Italy out of the euro could very well be in a position to carry out his promise? Last summer Finland was erroneously reported to have threatened to leave the euro. The rumour prompted the single currency to fall, but now, when the third largest economy in the eurozone is rumoured to do the same, the euro is stable.

 

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And The Rally Continues

And The Rally Continues

As we predicted on Monday morning, the stock rally continued, with Dow closing at a record high and S&P 500 finishing just one per cent from its all-time high. On Monday night the Dow ended at 14,447.29, spearheaded by Boeing, the American multinational aerospace and defence corporation and Merck, the global healthcare leader. The S&P 500 rose by 5.04 points to reach 1,556.22 by closing time. The index which tracks the top 500 publicly traded businesses in the U.S was almost 0.5 per cent from its all-time high of 1,565.15, which it reached in 2007. Moreover, Nasdaq increased by 8.51 points to hit 3,252.87 by closing of trading on Monday.

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Spring is in the Air

Spring is in the Air

Stock markets showed good sings on the first trading day of March on Friday, with the Dow close to hitting a record closing high, as surprisingly good numbers from ISM manufacturing report countered fears over China and Europe and as shareholders welcomed the forthcoming government spending cuts.

Since 1950, the first months of spring, March and April have been solid months for the Dow, with regular gains better than one per cent. Interestingly, particularly April has been the year’s best month, recording an average upsurge of 2.7 per cent per month since 1993 and 1.97 per cent since 1950.

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