The DOW hits 20,000 for the first time ever in the midst of one of the worst ongoing economies in US history. As a matter of fact, true unemployment numbers continue mirroring those of the Great Depression era. US manufacturing also remains dead as trade deficits rise into infinity.
The US has a consumer driven economy and in the real world, Wall Street performance should always be indicative of the US economy. Clearly this has not been the case for at least the past 9 years. Corporate buybacks, money pouring through discount windows and heavy management by the Fed have destroyed free markets. All that’s left is smoke and mirrors.
The Dow Jones Industrial Average has risen over 2,000 points since the pre-Trump lows and finally smashed its way through 20,000 for the first time after treading water for 28 days. Infrastructure plans and executive orders appear top have scare buyers back into the stock market (even though other Trumpflation indicators remain unimpressed). Of course the big driver was Goldman Sachs, which accounts for over 20% of all the gains by itself…
The Dow’s gains since the election reflects mostly major gains for banks, including shares of Goldman Sachs, which are up 29% and JPM up 21%. In fact, Goldman alone is responsible for 21% of the Dow’s increase.
Since the start of the year, however, the rally in the two groups has cooled, with investors rotating into Visa and Nike, two stocks that lagged behind from the election to the end of 2016 but are now up by more than 5% in 2017. IBM has also risen by 6% despite disappointing results.
The biggest ‘dip’ since Trump’s victory has been 1.3% and the last month has seen the lowest trading range for The Dow in history…
Meanwhile…. According to the Wall Street Journal, Wall Street Banks have sold almost $100 million worth of stocks since the presidential election.
It’s a great reason to own physical gold and silver. Silver will continue to outperform gold in 2017 and remains available below production costs.
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