Health & Fitness
The Dow Hits A New Record High...But Hold Off On The Champagne
The Dow Jones Industrial Average hit an all-time high. So Where's the excitement?
The Dow Jones Industrial Average closed at an all-time high yesterday for the first time since October 2007 but the response seems to be a collective "ho hum."
Why the muted reaction? The economy is still struggling despite higher stock prices. At the same time the market hit a new high household incomes hit a decade record low. The situation is Europe isn't much different as the unemployment crisis becomes a political crisis.
Reaction to the Dow’s record high reminds me of two old men sitting together on a park bench. One asks, “How come you never ask me about the business?”
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“O.K. how’s the business?”
“Don’t ask!”
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We are in a very different world than 2007. Consider this:
Today vs. October 2007:
Dow Jones Industrial Average: Then 14164.5; Now 14164.5
* Regular Gas Price: Then $2.75; Now $3.73
* GDP Growth: Then +2.5%; Now +1.6%
* Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
* Americans On Food Stamps: Then 26.9 million; Now 47.69 million
* Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
* US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
* US Deficit (LTM): Then $97 billion; Now $975.6 billion
* Total US Debt Outstanding: Then $9.008 trillion; Now $16.43 trillion
* US Household Debt: Then $13.5 trillion; Now 12.87 trillion
* Labor Force Participation Rate: Then 65.8%; Now 63.6%
* Consumer Confidence: Then 99.5; Now 69.6
* S&P Rating of the US: Then AAA; Now AA+
* 10-Year Treasury Yield: Then 4.64%; Now 1.89%
* Gold: Then $748; Now $1583
We still have a ways to go. As to the future none of us has a crystal ball. We do, however, believe our planning based approach helps clients focus on long-term goals.
What’s your take on the Dow’s record setting high? Thank you for reading. I would enjoy hearing from you in the comments section, at wlg@trustcoil.com or you can reach me directly at 630-545-3653.