Dow makes history reaching 32297 and set a new high
The Dow Jones Industrial Average on Wednesday 10th March 2021 closed above 32,000, reaching a new record high. The 30 stock index closed at 32297.
It took just 42 days to achieve the milestone and the index has now made two 1000 point gains in 2021 already, the first was on January 6th.
Dow leaders: Boeing, Goldman Sachs and Caterpillar
Dow laggards: Walmart, Apple, Procter & Gamble
Economic recovery
The Dow rally comes as economic data suggests that worries surrounding inflation and interest rates may have been over-cooked, at least in the short term, this helped stocks that might perform well against the backdrop of an improved economic environment. A $1.9 trillion stimulus package worked some magic too.
Against this more favourable backdrop, the Dow has climbed despite a bout of turbulence over the past several weeks, and of growing worries about stock-market valuations.
Stock rotation
A rise in benchmark bond yields has encouraged a rotation out of technology and growth stocks into those considered more cyclical in nature such as financials, energy and industrials which should perform well as the economy recovers.
The Nasdaq, however, is making up lost ground. After recovering 4% of its recent decline on 9th March 2021, futures indicate more gains to come on 11th March 2021.
Inflation fears put to rest?
Maybe inflationary pressures will increase again with all the extra stimulus about to flood the U.S. financial system. The U.S. economy is a $23 trillion machine and is running at about 85% capacity. The latest stimulus measure aimed to fight Covid will push the U.S. debt burden to around $5.2 trillion.
The debt continues to pile up!
Bond yields fall.
What’s next on President Biden’s spending spree?
One to watch
U.S. job data due Thursday 11th March 2021 at 13:30 UK time