Friday, December 23, 2016
Please note: Ahead of Wall Street will be taking a break over Christmas. Our next installment is slated for Wednesday, December 28th. Happy Holidays!
Well, we’ve seen the Trump Rally push forward in a major way over the past eight weeks, but apparently a Dow 20K is even beyond its considerable reach. The blue-chip index has gained nearly 2000 points since the election and roughly 4500 points since 2016 lows back in February of this year. That’s a quite considerable whallop, but still not enough to reach that psychologically pleasing milestone.
This time of year brings a lot less trading volume, lowering the chances of hitting that mark even more. And one need only look back to January of this year to see a troubling time for the Dow, as the index of elite large-caps fell hard and fast on concerns about global growth, oil prices under $30 per barrel and the domestic retail market. Obviously the sell-off was overdone, but at the time the precipitous drop was very real.
Are we in for a similar pull-back for the start of 2017? Well, Zacks Chief Strategist John Blank has said that even with a positive market outlook for the coming year, we might experience a 7-8% sell-off to get back to fair value (S&P 500 at P/E of 16). That’s certainly something to keep in mind going forward, as many investors view an S&P 500 at 2300 well in sight.
So Dow 20K may not be in the cards, at least until after Trump takes over the White House and, if policy matters and the incoming President’s cooperation with Congress go swimmingly — perhaps then we’ll zoom past and look for the next high mark for blue chips. That said, market participants often like to zig when people expect them to zag, so maybe we’ll see a quick bid-up to accomplish what has been in focus for the past couple weeks now.
In any case, the Dow is currently enjoying its longest winning streak in the past two years. While it’s possible we’ve pulled some gains from 2017 into this trading period, the overall outlook is still quite positive for publicly traded companies overall.
Mark Vickery
Senior Editor
Click here to follow this author>>
Image: Bigstock
All I Want for Christmas Is Dow 20K
Friday, December 23, 2016
Please note: Ahead of Wall Street will be taking a break over Christmas. Our next installment is slated for Wednesday, December 28th. Happy Holidays!
Well, we’ve seen the Trump Rally push forward in a major way over the past eight weeks, but apparently a Dow 20K is even beyond its considerable reach. The blue-chip index has gained nearly 2000 points since the election and roughly 4500 points since 2016 lows back in February of this year. That’s a quite considerable whallop, but still not enough to reach that psychologically pleasing milestone.
This time of year brings a lot less trading volume, lowering the chances of hitting that mark even more. And one need only look back to January of this year to see a troubling time for the Dow, as the index of elite large-caps fell hard and fast on concerns about global growth, oil prices under $30 per barrel and the domestic retail market. Obviously the sell-off was overdone, but at the time the precipitous drop was very real.
Are we in for a similar pull-back for the start of 2017? Well, Zacks Chief Strategist John Blank has said that even with a positive market outlook for the coming year, we might experience a 7-8% sell-off to get back to fair value (S&P 500 at P/E of 16). That’s certainly something to keep in mind going forward, as many investors view an S&P 500 at 2300 well in sight.
So Dow 20K may not be in the cards, at least until after Trump takes over the White House and, if policy matters and the incoming President’s cooperation with Congress go swimmingly — perhaps then we’ll zoom past and look for the next high mark for blue chips. That said, market participants often like to zig when people expect them to zag, so maybe we’ll see a quick bid-up to accomplish what has been in focus for the past couple weeks now.
In any case, the Dow is currently enjoying its longest winning streak in the past two years. While it’s possible we’ve pulled some gains from 2017 into this trading period, the overall outlook is still quite positive for publicly traded companies overall.
Mark Vickery
Senior Editor
Click here to follow this author>>