Thoughts on Dow Record
Almost every financial and general newspaper or news website has as its headline a story about the record peak of the Dow Jones Industrial Average. The same media appear evenly split on what happens now. Will the market race relentlessly higher, or will economic realities cause it to crash? A small sampling:
CNBC: As the Dow surged to a record high on Tuesday, one analyst has labeled the index the “new safe haven.”
CNN Money: Yes, the Dow may be at an all-time high. And the broader S&P 500 may soon hit a new peak of its own. But the American consumer is still hurting. Do not forget that as you read all the headlines about this record-setting bull market.
Wall Street Journal: Some money managers said they are starting to embrace the stock market’s gravity-defying rally, rather than keep looking worriedly in the rearview mirror at lingering consequences of the financial crisis.
New York Times: Nearly all strategists point out that it is much better to buy at a market bottom than to invest after a record has been set. Nonetheless, for those willing to accept the risk, there are strong arguments, based on history and on market fundamentals, for believing that the bull market may still have room to run.
Galaxy S IV Buzz
The frenzy over the launch of the new Samsung Galaxy S IV increases by the day. The smartphone will replace the wildly successful Galaxy S III, which has been called the Apple Inc. (NASDAQ: AAPL) iPhone killer. If the Galaxy S IV is as good as billed, the iPhone will be slaughtered. Some observers are not quite as excited about the phone because they do not expect much of an upgrade. CNET reports:
There’s one complaint that often crops up with the Galaxy S III: it feels “plastic-y.”
At a time when competitors are using glass, aluminum, and even higher quality plastics such as polycarbonate, Samsung has stuck to its guns with a thin, bendable plastic body.
Which is why the Galaxy S4 won’t stray too far from that design philosophy.
European GDP Still Slipping
If there is any question about the existence of a new recession in Europe, statistics operation Eurostat answered it. The agency has reported gross domestic product data for the final quarter of 2012:
GDP fell by 0.6% in the euro area (EA17) and by 0.5% in the EU27 during the fourth quarter of 2012, compared with the previous quarter, according to second estimates published by Eurostat, the statistical office of the European Union. In the third quarter of 2012, growth rates were -0.1% and +0.1% respectively.
Compared with the same quarter of the previous year, GDP fell by 0.9% in the euro area and by 0.6% in the EU27 in the fourth quarter of 2012, after -0.6% and -0.4% respectively in the previous quarter.
Among Member States for which data are available for the fourth quarter of 2012, Latvia (+1.3%), Estonia (+0.9%)and Lithuania (+0.7%) recorded the highest growth compared with the previous quarter, and Portugal (-1.8%), Cyprus and Slovenia (both -1.0%) the largest decreases.
Greece, the poorest stepchild in the region, did not release fourth-quarter numbers.
Douglas A. McIntyre