Dow rings in 2018 by recording another milestone

January 05, 2018

Keywords: Outcome Oriented Approach

Just four days into 2018, the stock market is picking up right where it left off, producing record earnings for its shareholders and reaching heights that have never been seen before.

For the first time in Dow Jones Industrial Average history - a phrase that has been oft repeated tracing back to November of 2016 - the blue chip index reached yet another milestone, this time surpassing 25,000, marking the quickest 1,000-point growth spurt in the DJIA's 121-year history.

The benchmark's torrid pace comes approximately one month - or the equivalent of a mere 23 trading sessions - after the Dow hit 24,000 back in Nov. 30, which at the time was also a first and is now up 25 percent in value since the start of 2016. Prior to that, the quickest 1,000-point ascension for the Dow was 24 trading days, occurring twice back in 1999 and also in 2017 after rising to 21,000, The Wall Street Journal chronicled.

Dow up 5,000 in previous year
Ever since reaching 20,000 - which happened Jan. 25 of last year, 483 trading days after hitting 19,000 - the Dow has been on a seemingly unstoppable roll suffering only a few hiccups along the way. By March, for example, the DJIA topped 21,000, then went to 22,000 almost exactly five months later in early August. Fifty-four days later, the blue chip index topped 23,000, then shuffled on to 24,000 on the last day of November.

Financial strategist Steve Claussen told CNBC that the Dow is performing at a level that few thought was possible this time last year.

"The Dow hitting 25,000 was a pretty wild idea even a year ago," Claussen explained. "And while its symbolically important, the real story is never just a number. It's the underlying strength that is pushing markets this high."

Indeed, gross domestic product in multiple quarters has risen by at least 3 percent, according to the Department of Commerce. The unemployment rate stayed well below 5 percent for the entirety of 2017, major corporations produced record profits in earning reports and wage growth is finally starting to pick up the pace.

Healthy jobs report anticipated for December
Fueling the index to its latest pinnacle was what is expected to be an auspicious December jobs report from the Labor Department. Economists polled by the WSJ forecast the jobless rate remaining unchanged at 4.1 percent, but adding an annual rate of 180,000 jobs to the economy. While that's an encouraging total - and is right around what the average was last year - employers created at least 200,000 jobs per month on seven difference occasions between January and November.

The blue chip index wasn't the only stock market indicator that reached all-time highs. The Standard & Poor's 500 tacked on 10.9 points on Dec. 4 and the Nasdaq climbed to 7,077, a 12-point uptick from the previous trading day. Both indexes have grown by 20 percent or more in the last 12 months.

Given the strong fundamentals, financial experts believe the bull market still has room to run.

"The naysayers missed out on a lot last year," Marc Chaikin of Chaikin Analytics told CNBC. "I think this is going to be another good year for stocks."

It's an exciting time to be in the stock market. Here at Miles Capital, we're cautious not to get caught up in the hype, our focus is squarely on our our clients, producing the kind of results they've come to expect from our outcome-oriented approach to investing.

Disclosures

This material is for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer, or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expresses may change as subsequent conditions vary. The information herein is based on sources which Miles Capital believes to be reliable, but is not guaranteed to be accurate or complete.

Past performance is not a guarantee of future results. There is no guarantee that any forecasts made will come to pass. There is potential for profit or loss with any investment. Index performance is shown for illustrative purposes only — you cannot invest directly in an index. No part of this material may be reproduced in any form, or referred to in any publication without the express written permission of Miles Capital, Inc.