The Latest Dow Record Happened in Record Time
By Amrith Ramkumar - Wall Street Journal - January 4, 2018
The 30-member stock average was on track to close above 25000 for the first time in its 121-year history Thursday, taking just 23 trading sessions to climb from 24000. The blue-chip benchmark added 0.3% to 25013 in early trading.
That would go down in history as the fastest run from one millennium marker to the next.
The previous record was 24 trading days, accomplished a year ago when the Dow hit 21000 and back in 1999 when it climbed to 11000.
A favorable earnings and economic backdrop has buoyed stocks over the past year, and the passage of tax cuts in Washington propelled major U.S. stock indexes higher still in December. January started with a bang too, with technology stocks powering the Nasdaq Composite above 7000 for the first time on Tuesday.
Another sign that the past year’s stock-market rally has been relentless: The Dow’s latest 5,000-point run was more than three times quicker than its 844-day rally to 10,000. If the 25000 level holds to the close, it will have taken the index 238 sessions to advance from 20000 in January 2017 to 25000 Thursday.
U.S. Factory Activity as Sales Hit 14 Year High!!
By Josh Mitchell - Wall Street Journal - January 4, 2018
The U.S. factory sector posted one of its best months of the economic expansion in December as sales hit a 14-year high, the latest sign economic growth is picking up. A key manufacturing index rose 1.5 percentage points from a month earlier to a reading of 59.7 in December, the second-highest level since early 2011, the Institute for Supply Management said Wednesday. A subindex of new orders—a measure of sales at factories—rose more than 5 points to 69.4, the highest since early 2004.
Details hinted at further growth in coming months.
While sales picked up, inventories—at both factories and their customers—fell. That combination suggests factories will have to boost production further in the first quarter of 2018 to satisfy demand.
Timothy Fiore, head of the ISM survey, pointed out the industry is also likely to see higher demand in 2018 due to a $1.5 trillion tax cut passed by Congress late last year. The tax-cut package is designed in part to prod U.S. businesses to spend on big-term projects, such as equipment and factories, in turn lifting demand for factory-made products.
“I think it’s really strong,” Mr. Fiore said of the sector’s health, in large part due to synchronized growth in the U.S. and around the globe.
“You’ve got most of the major economies around the world in good shape.” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients: “The manufacturing upswing continues, with no near-term clouds visible,”
The ISM said the December level of activity corresponds with the overall economy growing at an annual rate of 5.2%. U.S. economic output grew at a 3.2 annual pace in the third quarter, according to the government’s latest estimate.
Workers in 18 States Get Minimum-Wage Increases
By David Harrison - Wall Street Journal - January 4, 2018
The new year will bring higher minimum wages in 18 states and almost two dozen municipalities, continuing a recent trend of steady pay increases for the lowest-paid workers.
In some cases, the increases represent one of several steps in a multiyear process to slowly raise the minimum wage. Arizona, for instance, will see its pay floor rise 50 cents on Jan. 1, followed by another 50 cents in 2019 and $1 in 2020, part of a four-year process to boost the base salary for workers who don’t work for tips to $12 an hour by 2020. Voters approved a measure in 2016 to raise the minimum wage in four steps.
The minimum-wage increases come at a time when the labor market is exceptionally tight and employers are struggling to find workers. The unemployment rate, 4.1% in November, is at a 17-year low and employers have slowly started to offer higher pay to entice new workers. Wages have been picking up and were up 2.5% in November from a year ago.
