Investors Should Be ‘Terrified’ about the ‘Exponential’ Risk Associated with Dow 25,000
The comments above & below is an edited and abridged synopsis of an article by Sam Meredith
The Dow has broken above 25,000 for the first time, following the release of stronger-than-expected jobs data. In terms of trading days, it was the fastest 1,000-point gain to a round number in the Dow’s history. The 30-stock index broke above 24,000 on November 30, 23 trading days earlier. It took the Dow 24 trading days to go from 20,000 to 21,000 last year.
Wall Street’s recent gains should be of great concern to global investors, according to an analyst. “We’re really terrified,” Paul Gambles, managing partner at MBMG Group, said.
Gambles said that collective global growth at the level seen through 2017 was the GDP equivalent to a blow-off top. He added that similar levels of concerted worldwide growth were seen during previous financial crises and therefore the current risk to investors is exponential.
The Dow gained 152 points on Thursday to 25,075, while the broader S&P 500 and tech-heavy Nasdaq also hit milestones.
Earlier that day, it was reported that the US private sector added 250,000 jobs in December, well above the expected 190,000.
In 2017, prices were supported by a rebound in global economic growth and renewed investor optimism that looming corporate tax cuts would result in bigger dividends and share buybacks. A low interest rate environment was also believed to make stocks a relatively attractive investment.