The Markets This Week

January 9th, 2017

Multiple attempts were made on Mount Everest over a period of 20-some-odd years before Edmund Hillary and  Tenzing Norgay summited its peak in 1953. Hopefully it won’t take that long for the Dow Jones Industrial Average to reach 20,000.

Last Friday, the Dow came within 0.37 point of reaching that big round number, the closest it has come since Barron’s put the blue-chip benchmark on 20,000-watch on Dec. 10. Lost amid all the will-it-or-won’t-it was the fact that the Standard & Poor’s 500 index and the Nasdaq Composite closed at record highs last week, even as the Dow ultimately fell short.

The Nasdaq Composite climbed 2.6% to 5521.06. The Dow Jones Industrial Average rose 201.20 points, or 1%, to 19,963.80, its second-highest close on record.

Should we worry that the Dow faltered just as it seemed it would finally take 20,000? Probably not, says Sameer Samana, global quantitative strategist at Wells Fargo. The Dow has been making its attempt for only a few weeks, and its failure to break through has come after a 9.2% rally since Nov. 4. If the market stays in a rut, he might get worried. For now, Samana contends it’s “just a matter of time.”

And time appears to be on the market’s side. Even a “disappointing” payrolls report last Friday was unable to derail the stock market’s surge higher. Yes, the U.S. created 156,000 new jobs in December, fewer than the 175,000 predicted by economists. But the headline miss didn’t take into account the upward revisions to previous months, which easily offset the December shortfall. “We’re generating more jobs than there are people to fill them,” says Jonathan Golub, Chief U.S. Market Strategist at RBC. “It just feeds this,” he continues, “this” being the stock market rally, of course.

(Source: Barrons Online)

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