5 Points About the Stock Market’s Record Surge
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Just a few short years after America climbed back out of the worst recession it had endured in more than 75 years, today we are experiencing such powerful bull markets that new highs are being set across plural indexes. When considered in concert with the better-than-expected jobs report from last month and with consumers likely to spend big during the holiday season, the nation’s economy as a whole seems almost destined for boom times again. All too often, of course, that quickly leads to an economic bubble which can burst with catastrophic results.
5 The NASDAQ Neared 4000
The NASDAQ stock market is considered the ultimate crossroads of technology and finance, with many of the world’s biggest software, mobile services and other tech companies’ stocks trading on the exchange. As many of the biggest, most lucrative companies around these days are all about technology, when the NASDAQ is up, it is a sure sign that the economy, both the domestic and potentially the global economy, is doing well. And the exchange is way up right now: it is nearing 4000 points, an all-time record.
4 The S&P 500 Flies High
Many investors and economists consider the Standard & Poor’s 500 Index to be the most robust and reliable index for judging the economy as a whole. While the Dow is calculated based on just 30 giant corporations and while the NASDAQ is heavily weighted towards tech-related companies, the S&P 500 is comprised of numerous businesses from myriad walks of life, and thus offers a more balanced and nuanced look at the face of investing writ large. So when the S&P is passing 1800 points, trading above its all-time highs, investors writ large are happy campers.
3 The Dow Jones Shatters Another Record
For most casual stock watchers, the Dow Jones Industrial Average is the most familiar and telling index to watch. And those who were watching early this week will have seen it surge past 16,000 points for the first time in its storied history. The Dow went as high as 16,030 at one point, and over the past week experienced multiple record closes. The index is up almost 10,000 points above its lows from the depths of the Great Recession.
2 Markets Are Up Around the Globe
Perhaps the best sign that the American economy is actually recovering is the fact that economies and markets around the world seem to be doing better as well. Major indexes from Europe, such as the German DAX and French CAC 40 are both performing well, as is the powerful Japanese Nikkei, which has seen its points nearly double in the past year, up from a low of 8,898 to figures flirting with 15,250.
1 Thank the Fed
If there is one dominant factor behind the recent surges in the stock market, it is the Federal Reserve Banking System. Without the Fed maintaining an incredibly low interest rate on its loans to member banks, banks around the nation (and globe) would have less access to capital they in turn can spread around. And without the Fed’s persistent program of quantitative easing (AKA buying $85 billion worth of treasury bonds each month) there would be less money infused into the economy and less confidence infused into Wall Street.