Economics

Dow Jones Index showed the fastest growth over 120 years

The DJ index set another historical record by breaking the mark of 26,000 points.

The American market for the first time in history has added 1,000 points in just one week.

In order to dial the next thousand, the index of the largest American companies required only 7 trading sessions — this is the fastest result in its 120-year history.

Investors call growth abnormal and continue to guess when a rebound will begin. They are afraid that the correction may turn out to be as fast.

In 2017, the Dow Jones added 28%, in just two weeks in 2018 — another 5%.

Analysts have suggested that the reason for the growth of the index in the beginning of 2018 was good US companies report (fourth quarter of 2017).

The second, longer-term factor is the decrease from January 1, corporate income tax in the US from 35% to 21% within the tax reform of Donald Trump.

Most investment banks believe that the entire 2018 stock market will end in a plus. But the rapid growth of the beginning of 2018 causes the leaders fear.

The president of investment company Yardeni Research Ed Yardeni believes that the market is growing on the emotional actions of investors who are afraid to lose the rally, and not on the fundamental indicators — and this is fraught with further sharp correction.

The DJ Index is the oldest of the existing US market indices. It was created to track the development of the industrial component of US stock markets. The index covers the top 30 US companies. It considers the result of such giants as Apple, Boeing, Coca-Cola, General Electric, Intel, JP Morgan Chase, McDonald’s, Microsoft, Nike, Visa.

The best performer of the year was the aerospace giant Boeing, which has added 89% in 2017. Among other successful companies, we can name Caterpillar (+70%), Visa and Apple (both +46%) and Walmart (+43%).

This year, the General Electric company was the worst component of the “blue chip” index of the Dow Jones Industrial Average. It has lost 45 percent after a rough 2017. Also, the bad result had such companies as IBM and Exxon Mobil (both -7%), Merck (-4%) and Verizon (-0.8%).

Previously, it was reported that after a very successful 2017 stock market came the best post-New Year’s week since 2006.

The results of the winners showed that the market lost good reserves for the aerospace, engineering, fixture-brick and mortar industries. The future, as expected, behind information technology and trading.