Dow Jones Surges Past 25,000 for the First Time

Advertisement

Dow Jones - Dow Jones Surges Past 25,000 for the First Time

Source: Shutterstock

The New Year’s surge continued on Thursday with the Dow Jones Industrial Average crossing over the 25,000 level for the first time. There was no particular catalyst for the rise, merely a continuation of a no-volatility, no-drama uptrend that was the hallmark of the market action in 2017. This comes just one day after the Nasdaq Composite nabbed the 7,000 threshold.

One possible reason was the stronger-than-expected ADP payroll report, raising spirits ahead of Friday’s non-farm jobs report.

In the end, the Dow Jones 0.6%, the S&P 500 gained 0.4%, the Nasdaq gained 0.2% and the Russell 2000 gained 0.2%. Treasury bonds were weaker, the dollar continued its recent weakness, gold gained for the 10th consecutive session and crude oil added 0.6% on an inventory draw (largest since August).

Financials led the way with a 0.9% gain, while real estate investment trusts were the laggards, down 1.8%. Domino’s Pizza, Inc. (NYSE:DPZ) gained 2.9% on an upgrade from Oppenheimer on expectations for strong sales growth. Snap Inc (NASDAQ:SNAP) fell 4.7% on an downgrade from analysts at Cowen, citing mixed results from a buyer survey. Intel Corporation (NASDAQ:INTC) fell another 1.8% amid ongoing fears about reports of a processor-based security vulnerability.

Dow Jones Surges Past 25,000 for the First Time

Breadth was positive, with advancers outpacing decliners by a 1.5 to 1 ratio, while volume was relatively heavy, at 106% of the NYSE’s 30-day average.

Conclusion

The Dow Jones’ latest 1,000 point gain comes just 23 calendar days after the move above 24,000 on Nov. 1, the fastest large number jump ever. On a percentage basis, it’s the fourth fastest gain.

The flip side of this is the absolute lack of volatility, with the CBOE Volatility Index falling to an 8 handle for the second day in a row — something that has never happened before.

Remember, however, that a rise in inflation driven by wages is the lynch-pin that threatens to undermine this dynamic. David Rosenberg at Gluskin Sheff is looking for hourly wages to accelerate in the payroll data released tomorrow. Moreover, the persistent rise in energy prices — driven by harsh winter conditions — means that crude oil will start being a lift on overall inflation levels in a way that hasn’t been seen in years.

All together, that means that the Federal Reserve’s pace of 2018 rate hikes could be more aggressive than is widely assumed.

Today’s Trading Landscape:

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2018/01/dow-jones-surges-past-25000-first-time/.

©2024 InvestorPlace Media, LLC