Dow Jones on winning streak
The market is awash with talk this week of the 12th consecutive rise of the Dow Jones Industrial Average. The last time the bellwether indices of US equities had a longer "winning streak" was in 1987.
But it’s not just the DJIA that’s powering ahead. Global equity markets are also posting record highs. Bulls have taken heart from promises made by US President Donald Trump regarding fiscal stimulus, infrastructure spending and deregulation.
- sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 28 Feb 17
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The market is awash with talk this week of the 12th consecutive rise of the Dow Jones Industrial Average. The last time the bellwether indices of US equities had a longer "winning streak" was in 1987.
But it’s not just the DJIA that’s powering ahead. Global equity markets are also posting record highs. Bulls have taken heart from promises made by US President Donald Trump regarding fiscal stimulus, infrastructure spending and deregulation.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
But it’s not just the DJIA that’s powering ahead. Global equity markets are also posting record highs. Bulls have taken heart from promises made by US President Donald Trump regarding fiscal stimulus, infrastructure spending and deregulation.
A strong winning streak may leave you wondering if a big fall is waiting around the corner. But a winning streak doesn’t necessarily have to come swiftly undone.
Most bear markets have occurred in and around recessions. No one in the market seems to be forecasting a recession in the US any time soon, instead the thinking is that the US economy will fare quite well over the next year or two.
The 20% or so increase in the MSCI World Index since this time last year appears to be broadly justified by the rise in purchasers’ managers index. There is much more scope for profit margins and equity valuations to rise in Europe and Japan due to weak currencies. Indeed, we have already seen fund manager money flowing in that direction.
The outlook for advanced economies remains pretty good over the next year or two. On the whole, we expect developed market equities will continue to fare well for the time being.
In Australia, GDP figures show that a recession was avoided late last year.
Data also shows that wage growth in Australia continues at a record low of 1.9% year on year. This is clearly disappointing but not out of line with inflation.