Record-Setting Sessions

As fourth quarter reporting season got going to an optimistic start, spurred by large cuts in corporate taxes and optimistic global economic growth, the Dow Jones Industrial Average broke above the 26,000 level for the first time ever. It set a new record when it made the latest 1,000 point milestone move in a record-setting seven sessions, breaking the previous record of moving 1,000 points in 23 sessions.

When the Dow hit 25,000, President Trump joked about the blue-chip index hitting 30,000. The average has been up almost 8,000 points since Trump’s 2016 election. Additionally, Wall Street is optimistic because the unemployment rate in the US is the lowest it has been in 17 years, corporate profits are very strong and the economic growth around the globe is gaining momentum.

Furthermore, the GOP corporate tax cut is causing investors to buy more stocks because it will save companies billions of dollars. This money can then be used to return profits to shareholders. Some of the large companies that showed positive earnings were United Health, Citigroup and General Motors. However, skeptics are fearful that people are so excited about the rapid climb that people are afraid of missing out on the rally. Therefore, people are saying that the market might be in a “melt-up“, a result of the euphoria of these buying frenzies.