The Dow Jones Industrial Average is set to open above 28,000 points for the first time ever in its history. This comes after 30-stock average closed at 28,004.89 Friday. The Dow breached another key psychological level of 27,000 points for the first time ever a little over four months ago.
Ahead of the opening bell, the index is expected to open in the green. As of 6:00 AM EST the Dow was set to open at 28,014 points.
Year-to-date the index has shot up by over 20%. The 30-stock average opened the year at slightly above 23,000 points.
The Friday rally in the 30-stock average came after more signs emerged of the US and China nearing a trade deal . This was after President Donald Trump’s top economic advisor, Larry Kudlow, indicated that an agreement was imminent. Additionally, the rally came after the Commerce Department reported that US retail sales rebounded in October.
Stocks such as Microsoft, Apple, and United Technologies contributed significantly to the rally with all three setting all-time highs in the course of the day. All three stocks have appreciated by over 40% since January. Apple leads the pack with a 68% growth year-to-date. Microsoft and United Technologies have appreciated by 47% and 41% respectively since the year started.
Other Dow component stocks that have recorded gains of over 30% since the year began include Disney, Goldman Sachs, Home Depot, JPMorgan Chase, Procter & Gamble and Visa.
There have been disappointments as well and these include pharmaceutical giant Pfizer which has fallen by 15% since the year started. Pharmacy store chain Walgreens and multinational conglomerate 3M have both also depreciated by slightly over 9% since January.
After breaking above the psychological level, excitement is growing that the Dow now has the 30,000 mark on its sights. Among the analysts who are betting on this occurrence in the near future include Heritage Capital’s president Paul Schatz. Early last month, Schatz said that ‘Dow 30,000 is a strong possibility in the first quarter’ of 2020.
On the other hand, there are those who consider the index to have reached a ‘blowoff top’ . This includes financial expert Charles Hugh Smith who has argued that the new highs stocks have hit could signal the start of a bear market.
Additionally, this is not the first time a trade deal between the US and China has looked imminent only for those hopes to rapidly disappear. Until a deal is actually signed by President Xi Jinping and his US counterpart, fingers are best kept crossed.