One of the most important indices of the US stock market — Dow Jones – for the first time in its 121-year history, exceeded 23 000 points.
Since the beginning of this year the index has updated the record 49 times, reaching first to the mark of 20 000 points.
Edition of USA TODAY identifies 5 key factors of active growth of the index today.
The economic growth observed in all countries of the world. It’s not just the US GDP. The European economy is on the rise, as well as Japan. Emerging markets are in better shape, as commodity prices are recovering somewhat to the weakening of the U.S. dollar.
Last week the international monetary Fund increased its forecast for global GDP to 3.6% this year and 3.7% next year.
Corporate America has reported a 10% increase in profits of American companies in the first two quarters of the current year. This situation is observed for the first time since 2011. And although profit growth slowed in the third quarter of about 4%, the index is not affected.
Markets love liquidity — the presence of a large amount of money in global markets, which can be used to purchase stocks, bonds and other assets. Due to the weakening of the dollar markets do not lack money.
President trump had a few legislative triumphs since taking office in January, but investors «bet» and lay great hopes on its recent proposal to reduce taxes, which will be considered by Congress in coming months.
Companies such as Boeing, Apple and McDonald’s, which sell a lot of planes, smartphones and point of fast food abroad, benefit from a weaker dollar amid strengthening of the economy of other countries. A weak dollar makes goods from the U.S. more affordable in price. At the same time, foreign buyers have the opportunity to dispose of much larger amounts for purchases to U.S. companies.
Despite strong growth and positive trends of the us stock markets, not all experts are optimistic. Many of them fear a revaluation of shares and reminiscent of the «punters» on «black Monday» of 1987, when the same index Dow Jones plummeted by a record 23% for just one session. The anniversary of the fatal for the financiers of the event falls on October 19.
