Dow To 14,000… and Beyond?
By Frank Holmes, CEO and Chief Investment Officer, U.S. Global Investors
If you’ve been a hibernating bear lately, you’ve missed a ton of positive news, as U.S. construction spending rose, ISM manufacturing data beat expectations and the country added 157,000 jobs. In addition, the JP Morgan Global Purchasing Managers’ Index rose to 51.5, staying above the expansion level for a second month in a row. The strengthening data, as well as improving investor sentiment, helped the Dow hit 14,000 for the first time since 2007.
For the month of January, U.S. stocks experienced the best month in more than two decades. Per the Stock Traders’ Almanac market indicator, the “January Barometer,” the performance of the S&P 500 Index in the first month of the year dictates where stock prices will head for the year. Let’s hope so. As Adam Shell from USA Today writes, “While there's no guarantee that what happens in the first month of a new year will continue for the remaining 11 months, history is on the side of investors.”
Shell asked for my thoughts on this trend and I told him that sentiment has improved in part because several uncertainties have been removed from the market. Read the rest of the story here.
Sentiment among individuals, advisors and traders has experienced a sudden spike recently, says BCA Research. Its latest Bloomberg numbers show that 53 percent of those surveyed expect equities to be the best-performing asset class over the next year. This represents a “17-point jump over the previous poll in November, and the highest reading in the four-year history of the survey,” says BCA.
My anecdotal experience this week at the World Money Show in Orlando, Florida supports the view that investors are going “all-in” for equities, as the exhibit hall and conference rooms were packed with thousands of enthusiastic investors looking to gain insights. We enjoyed good conversations and I’m happy to have contributed a few ideas at the general session that attendees could immediately put into action.