First Slice for Friday, May 17, 2024
The stock market is a wild ride, and Thursday, it flirted with investors with a milestone: the Dow Jones Industrial Average surged above 40,000 for the first time, albeit briefly. This milestone holds a special allure, akin to reaching a mountaintop, for investors and Wall Street alike. But the Dow ended the day just shy of that round number, causing some to ponder the significance of such milestones.
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, likened breaking the 40,000 barrier to a shot of adrenaline for the bulls. But why do these round numbers matter so much? They’re like milestones in a marathon, marking progress and fueling confidence. However, despite the excitement, public interest in the record-breaking rally seems lukewarm, unlike the frenzy that accompanied the Dow’s first ascent past 10,000 in 1999.
While the Dow is a household name, pros consider the S&P 500 the true barometer of the stock market. And interestingly, Google searches for “Dow Jones” have waned, even as stocks soared. It’s as if the connection between market highs and economic optimism has weakened.
For investors, the significance of these milestones may be more symbolic than substantive. Eric Freedman, chief investment officer at U.S. Bank Wealth Management, sees it as nostalgic rather than a profound indicator. But what does this lack of public enthusiasm mean for the market? DataTrek’s Nicholas Colas suggests it could signal a bullish contrarian view: the rally isn’t driven by rampant stock fever, unlike the euphoria of the 1990s dot-com boom………….
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