5/21/14

Dow 5000 revisited

 click to read article on PBS

Dow 5000 update

On July 11, 2013, when the Dow Jones Industrial Average stood at 15, 460, I predicted that the Dow would hit 5.000 before it hit 20,000. On May 13, the Dow closed at all-time high of 16, 715 and the index has risen by 5.9 percent since I made my gloomy prediction. Is it time for me to surrender and join the bullsih herd?

No.

In this piece, I revisit the Dow 5,000 prediction and the economics of it, and I identify three macroeconomic hurdles to reaching Dow 20,000. The first of these hurdles is the U.S. Federal Reserve’s plan to end its loose money policy of quantitative easing by October of 2014.





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