Aa
Dow Jones Industrial Average hits 14,000 for the first time since 2007
http://www.nbcnews.com/business/dow-pushes-above-14-000-1st-time-2007-1B8209092#/business/dow-pushes-above-14-000-1st-time-2007-1B8209092
"The Dow Jones Industrial Average hit 14,000 for the first time since 2007, but where the blue-chip average goes from here is far from certain.
Indeed, the move itself was fleeting. Virtually as soon as the bluechip index hit the magic number it pulled back.
"Something like the Dow going to 14,000, I can contain my enthusiasm about that," Jack Bogle, founder and chairman of the Vanguard Group, said on CNBC. "It doesn't mean very much."
The last time the 30-stock Dow traded over 14,000 was in the days before the financial crisis and the near-collapse of Wall Street.
On Friday, the market crested that psychological level, buoyed by positive economic news.
One report showed the jobs recovery was continuing, albeit gradually, while a separate data set showed growth in manufacturing.
Both spurred hopes that those types of gains would be enough to keep momentum going.
Coming on the heels of retail investors pumping money into stocks for the first time in a year, market bulls believe momentum is on their side.
Nearly $32 billion went into stock-based mutual funds in January, according to the Investment Company Institute.
"What investors are doing is only starting to suggest that there is some intrigue in the market with January inflows," said Liz Ann Sonders, chief investment strategist at Charles Scwab. "It's too soon to say a turn is in, but it does feel maybe a little different this time."
Looking ahead, the market faces a dilemma: It needs the Federal Reserve to continue its bond-buying program to stimulate the economy and stock-buying, but eventually it will need to break free from that support if the gains are to be sustained.
Keith Springer, president of Springer Financial Advisory in Sacramento, Calif., said the trend for the last 20 years is "(w)e have a crisis, build a bubble to get out of it for five years, the market makes a slight new high, and then we crash."
The Dow hit its closing high of 14,164.53 on Oct. 9, 2007 amid a surge in optimism that there was virtually no limit to how high the market could climb.
The question of whether the current market is in a bubble phase - as Springer suggests - is likely one that will be answered only in retrospect. But there is little debate over whether the Fed has played an integral role in pumping it higher.
Those few who are unsure can check the central bank's own literature: A July 11, 2012 study from the New York Fed stated flatly that the market owed most of its post-1994 gains - that's more than 1,000 points ago on the Standard & Poor's 500 - to the 24-hour period before the Fed's Open Markets Committee meetings.
It is at those meetings, held eight times a year, where the Fed decides how it will target interest rates. And for the past four years, it also has been the scene for the FOMC to decide how much money it will create to inject into the economy. Some $3 trillion later, the Fed's influence is unmistakable as investors have piled into equities ahead of meetings where the Fed was expected to boost its easing measures or at least hold the line.
"Central bank liquidity has been by far and away the most important driver of asset prices since the Great Financial Crisis," Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, said in a report. "Liquidity has been the basis for our 'I'm so bearish, I'm bullish' view of financial markets over this period."
Indeed, investors have relied on the Fed to respond to bearish economic data with three phases of asset purchases, or quantitative easing. So good economic news sometimes is looked on unfavorably by a market that both has come to rely on its central bank backstop and fears that any upturn in the data will deter the Fed from more easing.
Hartnett, though, projects that cycle to end this year as confidence returns to the market......"
"The Dow Jones Industrial Average hit 14,000 for the first time since 2007, but where the blue-chip average goes from here is far from certain.
Indeed, the move itself was fleeting. Virtually as soon as the bluechip index hit the magic number it pulled back.
"Something like the Dow going to 14,000, I can contain my enthusiasm about that," Jack Bogle, founder and chairman of the Vanguard Group, said on CNBC. "It doesn't mean very much."
The last time the 30-stock Dow traded over 14,000 was in the days before the financial crisis and the near-collapse of Wall Street.
On Friday, the market crested that psychological level, buoyed by positive economic news.
One report showed the jobs recovery was continuing, albeit gradually, while a separate data set showed growth in manufacturing.
Both spurred hopes that those types of gains would be enough to keep momentum going.
Coming on the heels of retail investors pumping money into stocks for the first time in a year, market bulls believe momentum is on their side.
Nearly $32 billion went into stock-based mutual funds in January, according to the Investment Company Institute.
"What investors are doing is only starting to suggest that there is some intrigue in the market with January inflows," said Liz Ann Sonders, chief investment strategist at Charles Scwab. "It's too soon to say a turn is in, but it does feel maybe a little different this time."
Looking ahead, the market faces a dilemma: It needs the Federal Reserve to continue its bond-buying program to stimulate the economy and stock-buying, but eventually it will need to break free from that support if the gains are to be sustained.
Keith Springer, president of Springer Financial Advisory in Sacramento, Calif., said the trend for the last 20 years is "(w)e have a crisis, build a bubble to get out of it for five years, the market makes a slight new high, and then we crash."
The Dow hit its closing high of 14,164.53 on Oct. 9, 2007 amid a surge in optimism that there was virtually no limit to how high the market could climb.
The question of whether the current market is in a bubble phase - as Springer suggests - is likely one that will be answered only in retrospect. But there is little debate over whether the Fed has played an integral role in pumping it higher.
Those few who are unsure can check the central bank's own literature: A July 11, 2012 study from the New York Fed stated flatly that the market owed most of its post-1994 gains - that's more than 1,000 points ago on the Standard & Poor's 500 - to the 24-hour period before the Fed's Open Markets Committee meetings.
It is at those meetings, held eight times a year, where the Fed decides how it will target interest rates. And for the past four years, it also has been the scene for the FOMC to decide how much money it will create to inject into the economy. Some $3 trillion later, the Fed's influence is unmistakable as investors have piled into equities ahead of meetings where the Fed was expected to boost its easing measures or at least hold the line.
"Central bank liquidity has been by far and away the most important driver of asset prices since the Great Financial Crisis," Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, said in a report. "Liquidity has been the basis for our 'I'm so bearish, I'm bullish' view of financial markets over this period."
Indeed, investors have relied on the Fed to respond to bearish economic data with three phases of asset purchases, or quantitative easing. So good economic news sometimes is looked on unfavorably by a market that both has come to rely on its central bank backstop and fears that any upturn in the data will deter the Fed from more easing.
Hartnett, though, projects that cycle to end this year as confidence returns to the market......"
There sure has been a redistribution of wealth in this country but never in the direction that so many claim. It's all gone uphill.
Sitting on record profits while the average person sinks. Isnt that called Inequality or something like that?
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.***@**** to buy additional rights. http://www.ft.com/cms/s/0/8c2e3258-6c74-11e2-b73a-00144feab49a.html#ixzz2JgVFuSLM
Last updated: February 1, 2013 5:07 pm
US jobs increase gives markets a lift
By Robin Harding in Washington and Stephen Foley in New York
The US economy added more jobs than previously announced in 2012’s final months, sending equity markets higher and briefly pushing the Dow Jones Industrial Average of blue-chip shares above 14,000 for the first time since 2007.
The latest monthly jobs report provided evidence that a fall in gross domestic product at the end of last year was just a blip. However, the unemployment rate rose to 7.9 per cent in January, pushing it further away from the Federal Reserve’s target and calming market fears that the central bank might bring an early end to its programme of monetary stimulus.
The US added 157,000 jobs in January, and large upward revisions to November and December collectively added another 127,000 jobs, suggesting that the US labour market was improving at the end of 2012.
Treasury markets focused on last month’s new jobs figure, which came in shy of the 165,000 consensus forecast, and on the headline unemployment rate, which ticked higher from 7.8 per cent in December.
The Fed has said it will maintain its extraordinarily loose monetary policy, including a programme of bond buying known as quantitative easing, until the unemployment rate falls to 6.5 per cent. Traders broadly expect the Fed to keep up purchases at its current pace of $85bn per month until the second half of this year, but signs of a strengthening economy had begun to shake that faith.
The yield on the benchmark 10-year Treasury, which rose above 2 per cent ahead of the data, slid to 1.95 per cent shortly after the release. By late morning it was 1.97 per cent.
Together, the prospect of a boost to asset prices from extended Fed activity and the positive revisions in the employment report provided multiple reasons to buy equities and the US stock market rallied almost 1 per cent. The Dow was trading at 14,004 by late morning and the S&P was up 13 points at 1,511.
“We seem to be plugging along with fairly modest growth,” said William Even, professor of economics at Miami University’s Farmer School of Business. “But if we continue at this rate, it’s going to take a long time to get unemployment back down to acceptable levels.”
The unemployment rate rise was hard to interpret as the Bureau of Labor Statistics conducted annual revisions to its estimate of the US population. The overall picture from the labour market is one of steady growth in jobs that is not fast enough to bring down the unemployment rate.
“While it is encouraging that employment growth was somewhat better in 2012 than we had thought previously,” said Michelle Girard, senior US economist at RBS, “we do not think 180,000 payroll increases per month and a 7.9 per cent unemployment rate meets the Fed’s criteria for ‘substantial improvement’. Thus, we do not believe these data alter the outlook for Fed policy.”
The positive revisions in the data appear to contradict the 0.1 per cent annualised fall in US GDP for the fourth quarter of 2012 – which raised fears of a slowdown when it was released on Wednesday – and suggest the decline was due to one-off factors.
Most jobs growth came from the service sector, with retailers adding 32,600 positions, 25,000 more staff in business services, and 27,600 more jobs in healthcare.
The recovery in construction – one of the biggest changes to the labour market in recent months – continued with a further 28,000 jobs. But government continued to shed labour as fiscal policy tightens, dropping another 9,000 positions.
The jobs report has to be treated with some caution because of a large margin of error: plus or minus 90,000 for total jobs and 0.2 percentage points for the unemployment rate.
http://www.ft.com/intl/cms/s/0/8c2e3258-6c74-11e2-b73a-00144feab49a.html#axzz2JgF444nQ
Last updated: February 1, 2013 5:07 pm
US jobs increase gives markets a lift
By Robin Harding in Washington and Stephen Foley in New York
The US economy added more jobs than previously announced in 2012’s final months, sending equity markets higher and briefly pushing the Dow Jones Industrial Average of blue-chip shares above 14,000 for the first time since 2007.
The latest monthly jobs report provided evidence that a fall in gross domestic product at the end of last year was just a blip. However, the unemployment rate rose to 7.9 per cent in January, pushing it further away from the Federal Reserve’s target and calming market fears that the central bank might bring an early end to its programme of monetary stimulus.
The US added 157,000 jobs in January, and large upward revisions to November and December collectively added another 127,000 jobs, suggesting that the US labour market was improving at the end of 2012.
Treasury markets focused on last month’s new jobs figure, which came in shy of the 165,000 consensus forecast, and on the headline unemployment rate, which ticked higher from 7.8 per cent in December.
The Fed has said it will maintain its extraordinarily loose monetary policy, including a programme of bond buying known as quantitative easing, until the unemployment rate falls to 6.5 per cent. Traders broadly expect the Fed to keep up purchases at its current pace of $85bn per month until the second half of this year, but signs of a strengthening economy had begun to shake that faith.
The yield on the benchmark 10-year Treasury, which rose above 2 per cent ahead of the data, slid to 1.95 per cent shortly after the release. By late morning it was 1.97 per cent.
Together, the prospect of a boost to asset prices from extended Fed activity and the positive revisions in the employment report provided multiple reasons to buy equities and the US stock market rallied almost 1 per cent. The Dow was trading at 14,004 by late morning and the S&P was up 13 points at 1,511.
“We seem to be plugging along with fairly modest growth,” said William Even, professor of economics at Miami University’s Farmer School of Business. “But if we continue at this rate, it’s going to take a long time to get unemployment back down to acceptable levels.”
The unemployment rate rise was hard to interpret as the Bureau of Labor Statistics conducted annual revisions to its estimate of the US population. The overall picture from the labour market is one of steady growth in jobs that is not fast enough to bring down the unemployment rate.
“While it is encouraging that employment growth was somewhat better in 2012 than we had thought previously,” said Michelle Girard, senior US economist at RBS, “we do not think 180,000 payroll increases per month and a 7.9 per cent unemployment rate meets the Fed’s criteria for ‘substantial improvement’. Thus, we do not believe these data alter the outlook for Fed policy.”
The positive revisions in the data appear to contradict the 0.1 per cent annualised fall in US GDP for the fourth quarter of 2012 – which raised fears of a slowdown when it was released on Wednesday – and suggest the decline was due to one-off factors.
Most jobs growth came from the service sector, with retailers adding 32,600 positions, 25,000 more staff in business services, and 27,600 more jobs in healthcare.
The recovery in construction – one of the biggest changes to the labour market in recent months – continued with a further 28,000 jobs. But government continued to shed labour as fiscal policy tightens, dropping another 9,000 positions.
The jobs report has to be treated with some caution because of a large margin of error: plus or minus 90,000 for total jobs and 0.2 percentage points for the unemployment rate.
http://www.ft.com/intl/cms/s/0/8c2e3258-6c74-11e2-b73a-00144feab49a.html#axzz2JgF444nQ
Interesting, isn't it? NPR programming was talking today about this and attributing much of it to the amount of money the feds pump into the economy each month. They did also talk about some of the small improvements that we've had as well in various areas (personally, any improvement is very welcome and appreciated and shouldn't be discounted in my opinion). It is just interesting that this high comes at the end of the week in which we heard that our economy shrunk for the first time in a while.
I used to get really stressed out by the highs and lows of the market. Now it has fluctuated so much that I tend to just roll with it.
I used to get really stressed out by the highs and lows of the market. Now it has fluctuated so much that I tend to just roll with it.
You must join this user group in order to participate in this discussion.
You are reading content posted in the Current Events . . . Group
A list of national and international resources and hotlines to help connect you to needed health and medical services.
Herpes sores blister, then burst, scab and heal.
Herpes spreads by oral, vaginal and anal sex.
STIs are the most common cause of genital sores.
Condoms are the most effective way to prevent HIV and STDs.
PrEP is used by people with high risk to prevent HIV infection.
