Wednesday, 21 December 2016

Dow hits record as US growth could make stocks “look extraordinarily cheap”

Markets rose on Tuesday.

In the US, the S&P 500 rose 0.4 percent while the Dow Jones Industrial Average and the Nasdaq Composite both rose 0.5 percent to record highs.

Elsewhere, the STOXX Europe 600 rose 0.5 percent and the Nikkei 225 rose 0.5 percent.

US stocks continue to hit record highs amid warnings that the rally could stall, the latest such warning coming from Schaeffer’s Investment Research.

With the Dow and the S&P 500 approaching big round numbers of 20,000 and 2,300 respectively, selling is likely, said Schaeffer’s Todd Salamone.

Salamone also noted optimism coming into the market, “which usually occurs prior to a sell-off or trading range behavior”.

In contrast, Bryan Rich thinks that the stock market rally is “just getting started, and has a long way (higher) to go”.

“If we indeed get growth closer to 4% from pro-growth policies,” he wrote, “the S&P 500, relative to history, will look extraordinarily cheap.”

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