Investing

Dow 14,000: A Rally For The Ages (AAPL)(CAT)(MSFT)

As hard as it may be to believe, the Dow is withing 200 points of where it was a year ago, and above where it was last August. There is now plenty of talk that the recession may not be very deep, if there is one at all. The Wall Street Journal wrote that job cuts in this downturn could be modest.

The market may be back in rally mode. Part of the euphoria is due to the fact that corporate earnings were not awful. Big companies like Caterpillar (CAT), Microsoft (MSFT), Google (GOOG), Intel (INTC), and Apple (AAPL) did fine. The Fed has cut, just enough. The tight credit markets may be less tight

Even in the face of ugly credit news and rising oil prices, the Dow moved from 12,846 on August 16 of last year to 14,280 on October 9. All that in seven weeks.

If the employment numbers are good over the next month and retail sales for major store chains are not too bad, the Dow may start another ascent toward the summit. It will not be climbing a wall of worry at that point, It will be scaling the ladder of relief.

A sucker rally? Almost certainly. The fact that banks and brokerages are still raising money and hitting the Fed discount window like stick-up men is a clear sign that the financial world thinks it will have to weather more bad quarters. How many months can car sales drop 14%. Oil may be off slightly from its peak, but it still trades at $114. To saps, that looks good.

If the dollar actually starts to recover, hedge funds and wonks and quants will begin to go long the Dow. The Dow will start to go long. But, out on the unemployment lines and at gas stations and bank branches they know the truth better. It is always the guy in the caboose who finds out about the train wreck last.

Douglas A. McIntyre

Are You Ahead, or Behind on Retirement? (sponsor)

If you’re one of the over 4 Million Americans  set to retire this year, you may want to pay attention.

Finding a financial advisor who puts your interest first can be the difference between a rich retirement and barely getting by, and today it’s easier than ever. SmartAsset’s free tool matches you with up to three fiduciary financial advisors that serve your area in minutes. Each advisor has been carefully vetted, and must act in your best interests. Start your search now.

Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.