Three weeks ago, I posted about the Dow eclipsing 13,000 for the first time since May 19, 2008, also the first time during Barack Obama’s Presidency. Yesterday, the Nasdaq (Which originally stood for "National Association of Securities Dealers Automated Quotations") Composite Index closed above 3,000 for the first timer since December 11, 2000; nearly 12 years ago. WilliamJefferson Clinton was the in the White House at that time.
In a day that included the biggest one-day gains on Wall Street so far in 2012, the Dow also closed above 13,000, reaching its highest closing number since the end of 2007. It was the first time in the history of Wall Street that these two indexes finished the day above those respective marks. In fact, all three major indexes, Nasdaq, the Dow, and the Standard & Poor’s(S&P) 500 experienced their biggest one-day increases of the year; a rise of 1.9% for Nasdaq, 1.8% for the S&P 500, and 1.7% for the Dow.
The last time Nasdaq closed at 3,000 was during what would prove to be the end of the dot.com boom. Eventually, the index would lose 80% of its value. The dot.com boom was widely perceived to be a tech bubble; in effect, a time during which speculators saw growth widely predicated upon anticipated profits. Conversely, the current rise is based upon actual earnings by giants such as Apple (AAPL), Google (GOOG), and Microsoft. In addition, Dell, Cisco, and newcomer stock, Yelp, have also helped fuel the current surge.
Individual stocks have been integral in the market surge, especially in the Nasdaq increase. Bank stocks led by JPMorgan Chase also helped. However, one of the most significant catalysts for the current rosy Wall Street outlook is the Federal Reserve (the Fed). Indeed, the Fed met Yesterday and announced afterward that the American job market is, as one of my conservative friends has insisted for some time (and Mark, you know who you are) helping the economy repair itself. As a consequence, they indicated they would take no action.
The Fed is shifting from what many consider a doom and gloom outlook. This more optimistic Fed view seems to have cheered Wall Street. Few if any believe the country is free of economic concerns and on a course for complete smooth sailing for the foreseeable future. But if you’re in search of a hot tip for immediate future financial trends, from an admitted amateur, mind you, note that “since 2001, April has been the best month for stocks by a wide margin, up an average of 2.7% and generating positive returns eight of 11 years.” Now that and $6-8 will get you a latte or some other highfalutin beverage from your favorite designer coffee shop (Explicit Disclaimer: This advisory is solely for entertainment purposes).
As I noted in the previously referenced post, “Almost since the advent of Mr. Obama’s Presidency, critics, chief among them Republicans, have contended the President’s policies have been ill-suited to the economic challenges we face, and worse, ineffective. President Obama has countered for some time that the current state of the economy is substantially improved relative to when he took over, and he has a compelling case.” It is fair to say, after yesterday’s Wall Street triple play, that narrative proves to be more accurate than ever before.
The proverbial GOP Primary Passion Play continues to unfold. Mitt Romney, whom I still fully expect to survive the gauntlet and face President Obama in the fall, has yet to close the deal. Newt Gingrich armed with his neo-Southern Strategy, again failed to scratch, this time in his home region. He won neither
Despite any and all of that, I believe the Grand Old Party’s eventual nominee will mount a robust opposition to POTUS this fall. In the mean time, the economic environment, whether a function of the President’s policies, or of an overriding propensity for the nations’ finances to adapt, and fix themselves, we can say with certainty, yesterday was a magical moment…”Nasdaq, Dow and S&P 500: An Historic Trifecta!”
I’m done; holla back!
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