Barron's Sees Dow At 30,000

The Dow Jones Industrial Average hitting 20,000 was no fluke, according to the latest Barron's cover story, as current stock prices are well supported by corporate earnings and economic growth. Unless the new administration stumbles into a trade war, the Dow could overtake the 30,000 milestone by the year 2025.

"Next Stop, Dow 30,000" by Gene Epstein and Jack Hough makes a case for this aging bull market to live on. The Barron's Dow 30,000 forecast is based on historical data that suggests stock market gains will fall below the market's typical annual gain in the next five years before accelerating above the average in the years after that. However, the article admits, a few of President Trump's policies pose a serious threat to the economy and stock market.

See what the article has to say about the risks of what one leading analyst calls the Icarus trade and what another calls the "Sparkle and Fade." And what are the chances that the new president's policies result in a trade war, or changes to tax policies backfire and end up raising prices and damping growth. On the other hand, if Trump can succeed in reducing regulation and lowering corporate taxes, how much further could stocks surge this year?

Find out why Barron's is warily optimistic about the opportunity for positive economic-policy change from the Trump administration, despite the execution risks, and why it believes stocks will rise steadily in the near term. The article also includes a graphic look at the road to Dow 20,000 between 1960 and 2017. The venerable index didn't see a steady rise, but rather encountered plenty of pot holes along the way.

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