The Stock Market Being In An All-Time High And The Implication
- Posted on November 29, 2019
- Stock Market
- By admin admin
The
stock market has hit about nineteen-twenty new highs in the whole of 2019.
After
hitting a new high on July 26, the S&P 500 suffered a sharp sell-off
amid fears of an economic recession in August. That month, the S&P 500
dropped 1.8%. The index struggled through September but rebounded strongly.
On
October 28, The S&P 500 hit a
record high as investors cheered strong earnings and progress. The S&P 500
rose 0.6% to 3,039.42, closing above 3,027.98, the record set on July 26. The Dow
Jones Industrial Average gained 0.5%, or 132.66
points to 27,090.72. The Nasdaq Composite climbed 1% to 8,325.99. This was accounted for by the
U.S-China trade. This new high recorded in October drew the attention of President
Trump, and in a Tweet, he described it as a success and a big win for everyone.
Global equity strategist
at Jefferies, Sean Darby said, "The US equity markets have been surprised by the
strength of the 3Q results; with the US earnings season producing a positive
string of results and investors positioning extremely risk-averse alongside
negative US real interest rates, we believe there is further upside for global
equities.”
Following
Tuesday's close at another new all-time high with Dow Jones Industrial Average
55.21 points rise, Nasdaq Composite 15.44 points rise and S&P 500 6.88
rise, volumes were expected to remain subdued ahead of Thursday's Thanksgiving
Day holiday, which will see U.S. markets closed, followed by an abbreviated
trading session on Friday.
This
all-new high recorded on Tuesday marked the 10th record close of the month for
all three major indexes. The market was further driven by the developments in
the long-running U.S.-China trade battle, of which signals are being made to
resolve the less controversial issues. By December 15th, a new round of U.S.
tariffs on Chinese imports are due to take effect. In an Oval Office event on
Tuesday, President Trump said that Washington was in "final throes"
of reaching a trade deal with China, but underscored that Americans stand with
pro-democracy protesters in Hong Kong.
The
implication of this year-round all-new might be a correction or a bubble burst.
A correction
can as well be an implication of this all-new high, where the stock price
retraces to create a balance. The bubble burst is an economic cycle that is
characterized by the rapid escalation of security prices followed by a
contraction. With the current euphoria of rising stock prices and profit-taking, figuring when the bubble is likely to burst is not quite easy.
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