The Rally of the Dow

21-11-2016 | Dojo |

the-rally-of-the-dowThe current stock market has seen the Dow rally only twice in 20 years.

In the position that the stock is in now, it is on the track to great success.

There has been an 8.6% rise in the blue-chip index. This market indicator, for four sessions running, has been hitting high records.

The S&P stock market was up 6.68 percent while the NASDAQ was up 5.84 percent this year.

Both these figures are lower than the 8.6 percent that the Dow gained, making the latter the winner in the stock market.

The last time that this happened, meaning the last time than the S&P and the NASDAQ trading stocks were both beaten by the Dow, it was back in 2006.

Before that, it happened in 1996. It seems to take at least a decade to occur, but when the Dow rises, it rises big. This is good news for stock brokers and investors who have had their eye on the Dow for a while. There has never been a better time to reap the fruits of an investment.

The rally of the Dow was caused mainly by the big win that Donald Trump had in the election.

This shocked the world; most people were expecting his opponent, Hillary Clinton, to win the election. This included most of the stock market which had prepared itself for a Clinton administration and not a Trump one.

Investors lost money due to this, but those than invested wisely, in the Dow for instance, have it big in this moment. Different brokerage firms, like CMC Markets, had different advices to offer traders, but the firms that advised their investors to bet on the Dow saw it rise by a whole 3.79 percent between the day of the election and the Tuesday market close.

The market index rose because it leans towards financial and industrial stocks more than the S&P and the NASDAQ indexes. This is according to a top economist at the First Standard Financial Company, Peter Cardillo.

Since Election Day, the financial stocks and the industrial stocks alike have been dominating the market.

The stock brokers in these areas sure have a lot on their plates. The Dow rally is the Trump rally. Investors who trade in institutional stocks have made major turns since Donald Trump won. Those investors in the financial and industrial stock markets are enjoying the higher growth policies that will soon improve the position of the Dow even more than they already have.

International organizations like JPMorgan Chase bank and Goldman Sachs, the two single biggest components of the Dow, between Election Day and the close on Tuesday, gushed by 14.06 percent and 17.65 percent respectively.

This is good news for investors in the market who have stocks from the above mentioned organisations. The position of the Dow has taken a while before it has been this high. Since 2006, and before that, it also took ten years for this market index to outperform the S&P index and the NASDAQ index.

Might this be offering false hope for investors in this market?

The Dow may have rallied now, but its position is still very unclear. The Trump administration has a lot of uncertainty surrounding it, therefore making all the market factors that depend on it even more uncertain. Look at the position of the coal industry for proof; a market that was expected to rise immediately after Trump’s win but is still just as low as it was during the Obama administration.

Other markets, like oil and gold, have gained popularity in the Trump administration, but come the future, they might fall right back down.

The Dow has however had a history of performing big every time it has outperformed the other market indexes like the S&P and the NASDAQ. In the previous years that this has happened, the Dow has hit as high as 19000 and shot even higher.

For as long as a month, this index has performed higher than the rest; good news for investors in the financial and industrial stock markets. Many people, to mean stock brokers and investors, will be reaping the benefits of a soaring Dow. While this is happening, many will be suffering loses from a losing S&P and an even lower NASDAQ.

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