USA: Dow on verge of 30,000 and first record close in 10 months on back of Apple’s stock surge

The Dow Jones Industrial Average on Monday was knocking on the door of a psychologically significant 30,000 milestone, which would mark the first such round-number level for the benchmark since mid January as the stock market attempts to punch higher in the wake of the volatility inspired by the COVID-19 pandemic.

Read more at: Dow on verge of 30,000 and first record close in 10 months on back of Apple's stock surge - MarketWatch

US Economy; Complete disconnect between Wall Street and Main Street - by RM

Question, who or what is behind the major disconnect between Wall Street and reality, with stocks going up on the Dow for the past 4 days.Today by even more than 500 points, and this while economies are tanking all around the world, and while as many as 30% of the US workforce remains 
unemployed ?

Some companies obviously are making excessive profits as a result of the present emergency situation, but in no way is Wall Street a reflection of the state of the US economy, as President Trump likes to brag about.

The above is, however another clear indication of the great disparity between "the have and have nots" in the US and has to be remedied by an aggressive and progressive new Democratic government, before it destroys the USA from within.

EU-Digest

The Wall Street Smoke Screen : Will Dow futures point to a nearly 700 point Monday opening gain despite another oil-price drop

U.S. stock futures rose on Sunday night as Wall Street tried to recover from another decline last week.

Read more at:
https://www.cnbc.com/2020/04/05/stock-market-futures-open-to-close-news.html

Stock market : Data: Rings a Warning – The Stock Market Crash Isn't Over

Google Trends data shows huge interest from retail investors looking to learn how to buy stocks, and that's bad news for the Dow Jones

Read more at:
https://www.ccn.com/google-trends-data-rings-a-warning-the-stock-market-crash-isnt-over/

US Economy: Dow Drops Over 450 Points on Coronavirus Fears

The Dow industrials fell more than 450 points and crude oil slumped as the coronavirus spread from China to other countries, intensifying concerns it would deliver a fresh setback to the outlook for world economic growth.

Read more at:
https://www.wsj.com/articles/global-stocks-slide-on-coronavirus-fears-11580119666

US Economy: Dow plunges by more than 600 points in massive market sell-off - by Lucy Bayly

The Dow Jones Industrial Average sank by more than 600 points Monday, dragged down by a tumble in Apple and Amazon shares, mounting geopolitical concerns, and a strengthening dollar.

The S&P also stumbled, falling by 2 percent after shares in Goldman Sachs sank by more than 7 percent amid reports that Malaysia is seeking a multimillion-dollar refund from the investment firm for its role in the country’s 1MDB state fund money-laundering scandal.

The tech-heavy Nasdaq composite index was down 2.8 percent.

Apple had pulled down tech stocks early Monday after Lumentum, a key supplier to the Cupertino-based giant, said it was cutting its outlook for the second quarter of 2019 based on lower forecast production volume for one of its major clients.

Tobacco stocks also had a bad day, tumbling double digits on news that the Food and Drug Administration is mulling a ban on menthol cigarettes.
. 

Read More: Dow plunges by more than 600 points in massive market sell-off

US Economy: Dow Jones drops another 166.97 points today after a loss of 254 yesterday.

U.S. stocks on Wednesday ended a tumultuous session firmly lower after minutes from the Federal Reserve’s most recent policy-setting meeting sparked a fresh wave of volatility, as bond rates clambered higher and the dollar strengthened, weighing on equities.

Rea more: Dow gives up 300-point gain to end lower as bond yields rise after Fed minutes - MarketWatch

The Dow Jones Industrial Average is a totally meaningless figure, just like the Dow itself - here is why !

The first reason why stock market indexes, like the Dow, rise over long periods of time is that the indexe
s are not adjusted for inflation.

Inflation is when overall prices increase. It is a modern occurrence in most major countries. When there’s inflation, everything costs more as time passes, including the price of shares of stock
.
The Dow Jones index is calculated by adding up the non-adjusted stock prices of all 30 members and dividing by something known as the “Dow divisor,” which is continually adjusted to account for stock splits, spin offs and other changes. This divisor ensures historical continuity.

The importance of the long-term inflation in driving stock market indexes higher is seen by understanding the “rule of 70.” This rule shows how long it takes for the average price in the economy to double. For example, if something costs US$10 today, the rule of 70 shows how many years it will take for the price to reach $20. To determine the number of years, divide 70 by the inflation rate stripped of its percentage sign.

Since the turn of the 21st century, US inflation has increased prices by roughly 2.2 percent per year. If prices continue to rise at this rate, then the typical price of most things in the US will double roughly every 32 years (70 divided by 2.2). So if inflation were to persist at this rate, this means about three decades from now the Dow will hit 40,000, even if businesses sell the exact same number of cars, phones, movies, meals and all the other things available in the economy.

The second reason why the Dow inevitably rises over long periods of time is that under performing companies are periodically removed from the index and replaced by companies that are performing better.

Replacing under performing companies that have a falling stock price, with companies that have a rising stock price ensures the index continues to climb over the long term.

Charles Dow, one of the founders of the Wall Street Journal newspaper, started the Dow Jones Industrial Average in May of 1886.  His intention 120 years ago was not to create an index that regularly hit new highs. Instead, the goal was to give readers a single number to give them a quick understanding of how the stocks of the most important companies were faring.

Nevertheless, because the list of companies in the Dow has changed many times to eliminate under performing stocks, it is essentially designed, even if by accident, to climb ever higher.

The Dow for decades has been comprised of 30 stocks. Nevertheless, over its 120 year existence there have been 133 different companies on the list. The editors of the Wall Street Journal choose which companies are in the index and once a year, on average, add a new company to the list and drop an old one.

Since 2010, the Dow has included five new companies; Apple, Goldman Sachs, Nike, United Healthcare and Visa. To keep the list fixed at 30, five companies have been dropped: Alcoa, AT&T, Bank of America, Kraft Foods and Hewlett-Packard.

General Electric, or GE, is the only company that was both on the original 1886 list and included in the index today. Nevertheless, even this major company founded by Thomas Edison has not been on the list continuously. It was dropped in 1901 and then reinstated at the end of 1907.

Many famous companies in America were on the Dow and then were dropped before going bankrupt or drastically shrinking in size. Eastman Kodak was dropped in 2004, while Bethlehem Steel was removed in 1997, both only a few years before going bankrupt. The editors knocked off Sears Roebuck in 1999 and F.W. Woolworth in 1997 as people shifted away from buying items at department stores and five and dimes.

The periodic replacement of companies means the Dow operates like an actively managed mutual fund, in which humans pick companies that are expected to do well in the future. The Dow needs periodic human intervention. Without it, the list would slowly atrophy as companies die off or become less relevant to the overall economy.

In sum, the presence of inflation in the US and the continued efforts of editors at the Wall Street Journal to replace lagging companies in the index with companies that have high-flying prospects and stock prices will always result in headlines every so often that trumpet “turn-of-the-odometer” milestone.

Bottom-line:  Wall Street basically is a system of financial manipulation, some call it "a financial casino", used by smart financial brokers to get immensely rich, while keeping their clients happy, by providing them with returns on their investments, which are far below their own, but usually above the interest rates of Banking Institutions. The brokers themselves basically don't care if the stock market goes up or down, because they will earn money on shares sold or bought by their clients.  

If the stock market starts dropping rapidly, as it is doing now, and you are holding on to a large stock investment and have time to wait (usually several years)  leave it in, but if you are cash dependent or strapped, sell immediately. rather than going bankrupt.

EU-Digest

Wall Street: Dow closes at lowest level in 2 years amid global rout - by William Watts

It’s been a brutal morning for stocks. China and Japan were closed, but the rest of Asia saw plenty of carnage which then translated into big falls for Europe.

U.S. stock index futures are pointing to a particularly ugly open that could take major indexes toward two-year lows. S&P 500 futures are down more than 31 points, or 1.7%, while Dow futures are off around 270 points.

Treasury bond prices are jumping, sending yields down hard. The 10-year yield has come off lows burt remains down more than 8 basis points at 1.5928%–not so far away from all-time lows in the mid 1.40s set back in mid-2012.

The yen soared and gold is up more than 3.6%, or $42 dollars, as the scramble for safety continues.

There seems to be no single catalayst. Some commentators are pinning the blame on Janet Yellen’s Wednesday testimony in which she didn’t pour much cold water on prospects for further rate hikes.

But that seems a stretch given that stocks took the testimony relatively well in stride during the testimony. Yellen, will be testifying again Thursday.

Meanwhile, this graphic tweeted out by Rareview Capital does a great job illustrating the vicious circle that seems to be driving market action these days:

Read more: Stock market live blog recap: Dow closes at lowest level in 2 years amid global rout - The Tell - MarketWatch