Market Overview

What Dow 29,000 Does (And Doesn't) Mean For Investors

Share:
What Dow 29,000 Does And Doesn't Mean For Investors

Investors have gotten used to new market milestones in the past couple of years, and the Dow Jones Industrial Average hit another big one on Friday when it topped 29,000 for the first time ever.

Less than two months after it hit 28,000 for the first time and only six months after it first reached 27,000, the Dow hit an intra-day high of 29,009.07 on Friday morning before pulling back.

The Dow has been on a historic run in the past decade after hitting a financial crisis low of 6.469.95 in March 2009. The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) is up more than 340% in less than 11 years since hitting that low and has tacked on another 21.1% gain in the past year.

Expert Perspective on DJIA

But while investors celebrate the 29,000 mark, it’s important to keep perspective on both what it means for the market and what it doesn’t.

Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, says the most important potential benefit of Dow 29,000 could be that it sets up the push to Dow 30,000.

“The general public is still not fully committed to the rally, so that kind of break on the most known index could drive further gains. If we do clear 29k, expect lots of interest and coverage around when we will get to 30K - which could become a self-fulfilling prophecy,” McMillan says.

Chris Zaccarelli, Chief Investment Officer at Independent Advisor Alliance, says nice round numbers like 29,000 are always good for investor sentiment.

“All things being equal, it’s a signal that investors are more comfortable with the economy, the decrease in trade tensions and (now) the decrease in Middle East tensions,” Zacharelli said.

StockTwits data seems to confirm the idea that investor sentiment toward the Dow is on the rise. Over the past month, the percentage of StockTwits messages mentioning the DIA ETF that are bullish has climbed from just 26.2% to 63.4%.

Zacharelli said there are plenty more market-moving catalysts ahead in 2020.

“After passing this milestone the market may take a breather and see how the Democratic primary season unfolds,” he said.

Benzinga’s Take

The higher the Dow goes, the less important each new 1,000-point milestone becomes. However, the 30,000 level could ultimately prove to be a major psychological barrier of the Dow’s momentum continues in the coming months.

Do you agree or disagree with these predictions? Email feedback@benzinga.com with your thoughts.

Related Links:

US Adds 145K Jobs In December, Wage And Labor Market Gains Consistent With Fed's Outlook

Bernie Sanders Is The Biggest Market Risk Of 2020, Gundlach Says

Posted-In: Brad mcMillan Chris ZaccarelliAnalyst Color News Futures Top Stories Markets Analyst Ratings Best of Benzinga

 

Related Articles (DIA + DJIA)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ARDSRoth CapitalInitiates Coverage On18.0
PTCBairdAssumes
MNPRBrookline CapitalInitiates Coverage On42.0
HCKTCraig-HallumUpgrades
HNPDaiwa CapitalDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com