Dow Jones hit record high. What’s next?
Biden’s transition encouraged stock bulls. Dow Jones jumped to 30 000. Will it keep rallying?
What happened?
The Dow Jones Industrial Average passed 30 000 for the first time! It was caused by the combination of optimistic vaccine news and Biden’s transition. Trump agreed to concede Joe Biden as a winner of the presidential election, and that brought certainty and safety to the market. Elsewhere, Biden picked Janet Yellen to the post of the Treasury Secretary, which implies an expansion of support measures further. Investors have started to feel free in investing their capital in riskier assets.
Market reaction
Not only Dow Jones got a boost, but also individual stocks and other stock indices. For example, Tesla and Disney surged to record highs. The S&P 500 edged higher as well. Four stocks rose for every one that fell in the S&P! In fact, the stock market boom is a good sign as stocks tend to rise ahead of the overall economic recovery.
According to Schroders, “with the vaccine announcement it really doesn’t matter if the vaccine is distributed in the second quarter or third quarter next year, there is a light at the end of the tunnel”.
Don’t forget that to trade Dow Jones you need YM-20Z (Mini Jones Futures). 20 states for 2020, the letter Z – for the month of expiry. This CFD expires on December 18. You can always check it by clicking on the specification of a CFD on MetaTrader. Besides, you can read our article with detailed instructions on how to trade indices.
Technical tips
If Dow Jones sustains above 30 000, the way up to the recent high of 30 150 will be open. The current risk-on sentiment should drive it higher unless something bad happens. Not to miss it, follow US reports throughout the day as they may impact investors’ mood. If optimism wanes, and Dow Jones drops below the 50-period moving average of 29 560, the way down to the lows of the previous week at 29 225 will be clear. Follow the news and catch the market movement!
