Dow Jones Industrial Average Tops 20,000 For First Time in History
Pop open the champagne bottles, as the Dow Jones Industrial Average topped 20,000 points for the first time ever today.
The Dow Jones Industrial Average has been on an unbelievable tear since President Trump's election victory on November 8th. The index is up nearly 10% (9.5%) since that time, while the S+P 500 is up 7% and the NASDAQ is up roughly 9%.
The Dow Jones Industrial Average's gains have been led by banks, as the Trump Administration is expected to loosen the regulations that have decreased the industry's profits over the past decade or so. In addition, massive infrastructure projects, pro-business policies and an expected raft of tax cuts (both for personal and business) have helped to buoy the fortunes of many publicly traded companies over the past couple of months.
Sure, tail risk has likely materially increased since President Trump was elected in November, though the environment is certainly one that will be conducive to the shares of many companies heading higher, at least for now.
According to market historians, the DJIA's move from 19,000 to 20,000 was the second fastest 1,000 point move in its history, taking just 42 days to complete (the fastest 1,000 point move came in 1999, when the index took just 24 days to move from 11,000 to 12,000).
It should also be mentioned that it took the DJIA roughly 18 years to move from 10,000 to 20,000, as it first touched the 10,000 level on March 29th, 1999. If you'll remember, CNBC (which was remarkably popular at the time), had a massive amount of coverage for "Dow 10,000".
At the time, it likely would have seemed absurd to predict that it would take the market nearly two decades to breach the 20,000 mark, especially given the amount of bullishness that was prevalent in the markets at the time. Reversely, it would have seemed absurd to predict that the DJIA would break 20,000 within 7+ years of the darkest days of the "Great Recession" in 2008-2009.
Goldman Sachs has been the biggest contributor to the DJIA's gains over the past couple of months, as the company has made a massive move based on Trump's pro-business and pro-bank stance.
Filed under: General Knowledge