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The Record Close of the Dow Jones
The Dow Jones Industrial Average (DJIA) struck a record one of these days. On Wednesday, January 15, the DJIA closed at 29,000. It was the first time the blue-chip index hit or crossed that level. This came after the completion of the US-China trade pact’s first phase, when the Dow rose 0.3% to touch 29,030.22. It gained 90.55 points. And it was only 40 trading days before that the Dow closed at 27,000, on November 15, 2019. And when it hit 26,000 on January 17, 2018, it took only 8 sessions of trading from January 4, 2018 to soar from 25,000. Since that quick ascent in January, this was the fastest ascent.
MarketWatch analyst Mark DeCambre reckons this ascent is an indication of the rising upbeat sentiment of investors. These figures are a psychological steppingstone. Despite some of the risks investors feel in 2020, the sentiment has been positive. On the other hand, market experts also consider the bull market at this stage to be an indication of equity and bond markets becoming more highly valued than they should be, which prevents average investors from benefiting from this rise.
S&P 500 and the Nasdaq Composite Hit Milestones as Well
This gain was a record and it comes when the S&P 500 (SPX) index records its all-time closing high as well. The Nasdaq Composite (COMP) index also had an upsurge, recording its 2nd best gain ever.
The breakthrough in the trade talks between the US and China has proven to be the catalyst for markets to rise in 2020, while the Q4 earnings are also coming in. The greater the rise of the DJIA, the smaller is any 1000-point move in terms of percentages. Nevertheless, individual investors have always been encouraged by the Dow’s milestones.
The Role of the Federal Reserve
Some of the investors are of the opinion that a low-interest environment has been created by the Federal Reserve which has resulted in greater liquidity for the money markets. This has caused the equities to go through an upside. The Fed did indeed slash interest rates to between 1.75% and 2% over fears of a clash in the trade policy between China and the United States.
In any case there is a great deal of positivity spreading because of these milestones, though there will be experts who downplay them.
The Europe Trade War
Now since we’ve mentioned the trade war between the United States and China, experts warn of another potential war brewing between the United States and Europe. Following the US imposing a tariff of 25% on wines imported from France, Germany, Spain and Great Britain back in October 2019, Motley Fool reports France is considering imposing a tax on Google ($GOOG, $GOOGL) and Facebook ($FB). The Trump administration is reportedly looking at hiking duties on European whiskies and wines, before moving on to imported cheese, olives, cookware and handbags. That’s something you need to be wary of, if you’re considering restaurant and retailer stocks.
However you trade, whether you are bullish with the market positivity or want to trade more cautiously, TradeZero offers trading tools to help you including direct market center access trading platforms and commission free trading. Call us at (718) 709-4925 or email us at firstname.lastname@example.org.
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