Down goes the Dow

+10% today! nice.

Does sound like a good short

but the problem is animal spirits. One tweet from Musk and MSTR goes up 25%.

The stock market bottomed on October 12, 2022, marking two years since the start of the ongoing bull rally. Since then, the Nasdaq 100, S&P 500, and Dow Jones Industrial Average have posted impressive gains of 88%, 62%, and 46%, respectively.

Courtesy of Morningstar, why the Bull market should continue.

"The bull market is nearing its second birthday. Here's why it will likely continue."

Most bull markets since the end of World War II that have lasted at least two years have continued through year three
The bull market in U.S. stocks is about to turn two years old, the latest milestone for a rally that has surpassed the expectations of all but the most bullish investors on Wall Street.
The S&P 500 SPX has climbed more than 60% since Oct. 12, 2022, when the index hit its bear-market closing low of 3,577.03, according to FactSet data. These gains have unfolded much faster than many financial professionals had anticipated, pushing Wall Street firms to repeatedly raise their year-end targets to keep up.
See: Why Goldman Sachs has bumped up its S&P 500 target for the third time this year
The data paint a picture of a bull market showing few signs of slowing down, even if the path higher has gotten a bit more bumpy over the past three months. The Cboe Volatility Index VIX, known as the VIX or as Wall Street's "fear gauge," touched its highest level intraday since March 2020 during a global market meltdown on Aug. 5, according to FactSet data. But the jump in the fear gauge quickly receded as stocks bounced back. A similar slump followed during the first week of September, but that dip also attracted more demand from investors looking to pick up stocks at a discount.
Since then, the S&P 500 has capped off its best performance during the first three quarters of the year since the late 1990s. And if it can hold on to its gains until the end of December, it would mark the second straight year in which the S&P 500 has risen by 20% or more - the first time it will have achieved such a feat since 1998, Dow Jones Market Data show.
But the potential risks to the rally have multiplied recently. U.S. stocks are currently sitting on valuations that are high relative to history and just shy of their previous peak from late 2021.
Geopolitical risks are percolating once again, as renewed conflict between Israel and Iran has pushed crude-oil prices higher and left stock investors on tenterhooks.
And as the third-quarter earnings season begins, investors will likely cast a critical eye toward reports from Microsoft Corp. (MSFT), Alphabet Inc. (GOOG) (GOOGL) and the other artificial-intelligence "hyperscalers" for any clues about how long it might take for these companies' massive investments in AI technology to pay off. Later on, same investors will get a look at earnings from Nvidia Corp. (NVDA). When the company reported its last round of results in August, those results, although strong, weren't strong enough to boost shares.
Finally, the U.S. election on Nov. 5 has many traders buying hedges that would protect their portfolios from any volatility that might result from a race that could come down to the wire and potentially involve a contested result.
Because of all this uncertainty, millions of investors around the world are looking for guidance about where the market might be headed next.
A team of analysts at Ned Davis Research decided to dig into this question by closely examining how bull runs have fared in the past after making it to their second birthday.
They found that, since the end of World War II, there have been 12 bull markets that lasted at least that long. The current one would be the 13th, barring a massive selloff between now and the end of the week.
Seven of those made it to the end of their third year, suggesting that the chances that the current bull run will continue are in investors' favor.
The median two-year advance for all 12 runs was 54.4%, according to Ned Davis, which means that the gains that stocks have seen over the past two years actually aren't that extraordinary relative to history.
But going forward, things get a bit murkier. Rallies that made it to their third birthday saw a median gain of 13.3% during their third year, according to the Ned Davis team. Those that didn't saw a pullback of minus 5.9%.
Bull markets don't die of old age

Well, it's getting close. I decided to check after the Dow did so well last week.

Dow YTD: UP 17.53%

Flagpole YTD: UP 17.91%

The Dow could eke out a win this year after all. Doesn't really matter though.

From Jan 2000 to Dec 2009 Small cap Value (VISVX) cagr was 7.69%; S&P 500 was -1.03%; Total US Stock market (VTSMX) was -0.27%. Yet, it had a larger drawdown during those 10 years; -56.13% to -50.97% and -50.89% respectively!

Using Friday's close for DIA, total return for the DJIA is 19.24% YTD.

Will the change out of Intel and Dow for Nvidia and Sherwin Williams in Dow 30 materially change the performance %'s of Dow 30 going forward?

yeah that was a wild 10-year period. Zero return for US stocks but emerging rocketed up and small cap was fine too.

I think of that period often as an example of the pendulum. And how unexpectedly the market can move. Few expect emerging or foreign developed to beat the US going forward, but it could happen, and in a big way. Have to make that part of your assumptions/portfolio design.

Not what this says:

https://www.slickcharts.com/dowjones/returns/ytd

Learn the difference between an index's price return and total return. Yes, it's easy to beat an index price return when you're comparing it to your current portfolio value. The portfolio value is generated by the reinvestment of dividends and capital gains (plus the timing of funds added or subtracted). Thus the proper comparison is the total return of the chosen index (and equivalent additions and subtractions). If my sole investment was VINIX, I could say I've beaten the S&P 500 Price Index each year, but not the S&P 500 Total Return Index. Using the ETF DIA, the DJIA Total Return is now +20.42% for the year!

not so fast

crazy trump just announced blanket tariffs on everything coming in from canada and mexico. Stock market down in the after hours whatever it gained today.

trump and his voters think mexicans and canadians pay tariffs, but they'll soon learn no, Americans pay the tariffs.

How'd yuo like to be a buyer for a US company right now? In 8 weeks his US company will suddenly have to pay huge tariffs for the stuff they buy.

or a US trump voter who suddenly learns he's voted for higher prices on many or even most things.

Buckle up for the crazy. Shock and awe baby, shock and awe.

I suppose there will be an absolute bonanza of buying between now and January 20 to get in under the tariffs and that will juice some economic numbers.

This is why I cut my stock ownership. Just wait until he starts the roundups and the crazy really gets underway. he said he'd be a dictator and he will do his darndest to become one. this is real now, not a brash campaign seeking headlines.

Prices are about to rise at walmart. Get your tips and ibonds.

yeah I've always said that Flagpole probably goes by index return and not total return.

Flagpole if you want a shortcut, just go to morningstar and search for ticker DIA. Go to the performance tab and use that as your benchmark. That's an ETF that tracks the total return of the dow.

S&P 500 YTD: UP 25.0%

CG 2 YTD: UP 31.9%

Not sure if you're aware, FP, but the Dow Jones hasn't been used as a representation of the market as a whole for at least several decades. If you simply bought and held a S&P500 index fund you'd have performed about 40% higher than you have so far this year. Might want to try to learn some basics of finance and investing sometime.

Hayden
@the_transit_guy
You’ve got to admit, a majority of the country voting for a man because of the “price of goods are too high”, only for him to increase prices on his first day in office, has to be regarded as one of the greatest social experiments of all time.

A Soros DEI pick, Newname and GoI go home devastated!

Donald Trump announces he'll impose a 25% tariff on ALL products coming into the United States from Mexico and Canada on his first day in office.
This is going to be a disaster of epic proportions for the cost of goods.

Automobiles and Auto Parts
Why: Mexico and Canada are integral to the North American auto supply chain, producing a significant share of vehicles and components (e.g., engines, transmissions, and electronics).
Impact: Cars, trucks, and repair parts would see price hikes, making both new and used vehicles more expensive.

Food and Agriculture
From Mexico:
Fruits and Vegetables: Tomatoes, avocados, limes, berries, and peppers are major imports. Prices for fresh produce would rise, especially during winter months when U.S. production is limited.
Meat: Pork and other meat imports from Mexico could become pricier.
From Canada:
Dairy: Cheese, butter, and other dairy products imported from Canada would become more expensive.
Seafood: Products like salmon and lobster would also see price increases.

Energy Products
Why: The U.S. imports significant quantities of crude oil and refined petroleum products from Canada.
Impact: Gasoline, diesel, and heating oil prices could rise, affecting transportation and home energy costs.

Electronics and Appliances
Why: Many consumer electronics and appliances are assembled or contain components manufactured in Mexico.
Impact: Laptops, televisions, washing machines, and refrigerators could become costlier.

Building Materials
Why: Canada is a top supplier of timber, lumber, and construction materials to the U.S.
Impact: Home construction and renovation costs would increase, affecting housing affordability.

Pharmaceuticals and Medical Equipment
Why: Some generic drugs and medical devices are imported from Mexico.
Impact: Healthcare costs for consumers could rise, particularly for common medications.

As much as I think flaphole is a narcissistic blowhard, he has been clear about comparing against FJIA, the price index. Let’s not change the yardsticks this far into his imaginations.

DJIA. Stupid jet lagged fat fingers…