Wednesday, January 25, 2017

Dow Jones: more than a century waiting for the 20 thousand points – Jornal de Negócios – Portugal

For the first time in the history of the index the us industrial Dow Jones has reached, and surpassed, the psychological barrier of 20 thousand points. After you have exceeded this mark during intraday trading Wednesday, 25 January, at this time, the Dow Jones negotiates the value 0,76% for 20.063,98 points, but if so that may also be the first time that this index closes above referred to 20 thousand points.

it took more than 120 years, since the Dow Jones began to be calculated in 1896, to arrive at this mark of 20 thousand points. CNN writes that in this period began by the White House 22 presidents, who have had to deal with 22 recessions, a Great Depression (1929), and at least two “crashs” scholars.

So that this long journey would reach the mark of 20 thousand points were decisive, in particular, the last seven years. Because the burst of the housing bubble in the United States and the failure of Lehman Brothers in 2008, and losses on subsequent derivatives of the fears about the collapse of the financial system, was followed by a phase of gains for the Dow Jones since March 2009, more than tripled.

The Dow Jones benefited from that, which is the second longest period of “bull market” (characterised by optimism and high investors ‘ confidence that financial assets will continue to rise) in the entire story.
Known as a stock exchange index industrial, the Dow Jones integrates all of the securities holders of shares of 30 large listed industrial.

When it was launched, in 1896, the Dow Jones consisted of only 12 listed companies, and the General Electric (GE) is the only one that remains to this day. It was in 1928 that struck the 30 companies, which since then have varied through the evolution of the own market.

The effect Trump

If it is certain that the appreciation trend of the Dow Jones has been the case since March 2009, has been since November that the same became more pronounced. The day 8 of November was the date that marked the victory of Donald Trump in the presidential north america. It is also the day that marks the strengthening of optimism of investors of Wall Street in the face of the economic and financial policies announced by the then still president-elect of the USA.

this Is what the markets and the economic press called “Trump”, which already today welcomed by the brand achieved, with a characteristic “Great!”. This effect stems from the expectation that Donald Trump pursue policies based on the reduction of the tax burden on families and, primarily, the companies, and in the diminution of regulations and rules applied to sectors such as the financial or environmental. And still on a strong public investment directed to the construction and rehabilitation of infrastructure such as bridges and roads.

This optimism had already done that in the past January 6, the Dow Jones had set a new historic maximum very close to the barrier of 20 thousand points. If the index closing the session above this mark, it means that you have required 42 sessions – the count from the first in that closed above 19 thousand points – to value thousand points, which will be the second-best performance in the history when in question is a valuation equal to or more than a thousand points.

The best performance was achieved between 29 March and 3 May 1999 series the Dow Jones needed just 24 trading days the scholar to go from 10 thousand to 11 thousand points. To go from 18 to 19 thousand points required 483 sessions scholars, the equivalent of almost two years.

May 26, 1896 – it Was the first session grant from the Dow Jones, which closed the day in the 40,94 points. In August of the same year would decline 30% to the record low 28,48 points.
January 1906 – The Dow Jones ended the session for the first time in the three digits.

October of 1929 – On the 28th of October, leading up to the Thursday black 29 Oububro, the Dow Jones industrial average lost 38 points, losing more than 31 points on the day following, which at the time was the equivalent of the drops of 13% and 12%, respectively. These performances will continue to be among the worst ever for the stock exchange index.

November 14, 1972 – After about 13 years in that the Dow Jones has not suffered major changes, the index arrives for the first time to the thousand points, soon after Richard Nixon has been re-elected president of the United States.

Crash of 1987 – On the 19th of October 1987 the Dow Jones sank 508 points, equivalent to a drop of 23%, still the largest daily loss recorded by the index. However, in less than a year the Dow Jones had already recovered to pre-crisis levels.

10 thousand points – On the 29th day of March 1999, the Dow Jones has reached the 10 thousand points in a season in which it was lived in the period that would be in history as the “bubble technology”. The bursting of that bubble he will fire live rounds in the Dow Jones to a devaluation of close to 30% in September 2001, the month marked by the terrorist attacks which were aimed in particular New York and Washington.

the financial Crisis of 2008-2009 – The financial crisis triggered in 2008 has caused the Dow Jones lost nearly half its value for the scholar in a period of less than a year. The worst day was the 29th of September 2008, the session in which the Dow Jones lost 778 points, the biggest loss of the daily history of the index. This was the session that followed the decision of Congress to reject a bailout to the bank of american in the amount of 700 thousand million dollars.

15 thousand points – One of the stronger periods of the bull market on 7 May 2013 the Dow Jones reached the mark of 15 thousand points. In a phase marked by the optimism, the Dow rose from 14 to 15 thousand in just two months. Also now the recovery of 19 to 20 thousand came in a period of about two months.


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