The Dow Jones Industrial Average eclipsed the 30,000 level for the first time on Tuesday. It took the Dow 17 years to make it from 10,000 to 20,000, but less than four years to reach the 30,000 level.
The 30,000 level is a nice psychological milestone, but investors are already asking themselves what, if any, significance does Dow 30,000 hold.
Voices From The Street: Ryan Detrick, Chief Market Strategist for LPL Financial, said the achievement is a good time for investors to take perspective on a strange year.
“Although 30,000 isn't much different than 29,999, there is something special about those big milestone numbers. This is yet another reminder of how far stocks and the economy have come since the depths of March,” Detrick said.
Brian Price, Head of Investment Management for Commonwealth Financial Network, said the last push above the 30,000 market appears to have been largely driven by hints that the transition of power from President Donald Trump to President-elect Joe Biden will be smoother than some had feared.
“There may not be a formal concession by President Trump, but the market seems to believe that there is increased hope for a smooth transition to the next administration,” Price said.
He said vaccine news and other recent headlines have been bullish for stock prices as well.
“There also seems to be a general high level of optimism regarding the presumed selection of former Fed Chair Yellen as the next Treasury Secretary.”
Trump’s Take: Even President Trump himself held a very brief press conference on Tuesday to comment on the historic milestone.
“That’s a sacred number, 30,000, and nobody thought they’d ever see it,” Trump said. “I just want to congratulate all the people within the administration that worked so hard, and most importantly I want to congratulate the people of our country, because there are no people like you.”
Benzinga’s Take: With coronavirus cases hitting record highs and many Americans still not back to work, it may seem strange that the SPDR Dow Jones Industrial Average ETF Trust DIA is up 5.8% year-to-date and trading at new all-time highs.
However, the stock market is a leading economic indicator, and investors appear to be pricing in another aggressive round of government stimulus in the near term and a longer-term fundamental economic recovery driven by a vaccine.
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