In a Nutshell
- The DJIA has been trending downward since its peak over 34,000 in August.
- The Dow topped 34,000 at any portion of the trading day just twice in the month of October.
- Third-quarter earnings data for several Dow companies, as well as GDP data, are encouraging.
The Dow Jones Industrial Average has been trending down since this summer. Since topping 35,000 in August, it has lost more than 1,000 points, hovering around 33,000 in late October.
With top offshore betting sites offering prop bets on the financial market, why not take a look at how you can diversify your portfolio?
Recap
There were only two days in the month where it topped 34,000 at any point during the trading day. Third-quarter economic data has been trickling in, and it appears that the rate of decline may be slowing or flattening out.
With just over two months left in 2023, which way does Dow go? Will it begin to rebound as tends to happen in fourth quarters, or will it continue to stall in the 33,000s?
Best of the Lot?
Most major markets and indices have been on a downward trend, as economic news continues to be worse than expected, with inflation not slowing as much as hoped and interest rates continuing to climb. The Dow has had several major one-day drops, including a 400-point plunge in September that was its largest decline since March.
Still, the Dow appears to be doing better than the S&P 500, which has been approaching full-blown bull market territory, and the Nasdaq, which has also been flirting with the bull.
Dow seems to be buoyed by a handful of companies. The late October stabilization, while the S&P and Nasdaq have not fared as well, is due in large part to positive third-quarter data from Microsoft, 3M, Visa, Verizon and Coke. The question is whether those companies represent a trend or are outliers, as we await information from other companies that make up the Dow Jones Industrial Average.
Shot in the Arm?
Company earnings are the only third-quarter data that impacts the Dow, and a big piece of the puzzle clicked into place on Thursday. The U.S. third-quarter GDP was released, and the headline is encouraging, although digging into the numbers uncovers a more mixed message that is similar to most economic news in recent months.
The GDP, or gross domestic product, is a way to measure all goods and services produced in the country. It was expected to grow by a 4.7% annualized rate in the third quarter, but it outpaced that, coming in at 4.9%.
That increase was double the growth the economy showed in the first half of the year, and it could mean that consensus forecasts of a further drop in indices in the remainder of the year could be incorrect. Consumer spending was up, which is more good news, but much of the GDP increase—about 30%–came from increasing unsold inventories.
The Dow dipped upon the release of the news, however, and the new jobless data, which saw claims rise by 10,000, also fueled the decrease. Still, the GDP data is a strong indicator that the forecasts of a slowdown may have been incorrect, so the long-term news may be good. The Fed is expected to meet in early November, and most experts think that it will choose not to further increase interest rates, which could also be interpreted as good news.
Conclusion
So, does the Dow get back to 34,000 by the end of December? Or does it fall short of the mark? The most recent news has been good, and big-picture news stories that will eventually impact the market also seem to be trending in the right direction: This week, the auto workers settled their strike, and the House finally elected a new speaker.
Reduced uncertainty is generally a good thing for investors, and those two moves removed a great deal of it. Israel’s continuing decision to hold off on a full-blown ground invasion of Gaza could also be a sign of a better-than-expected outcome in that area, as well.
Is that enough to move the market off of the generally gloomy prediction for the next two months? It at least makes it a good bet. Finishing under 34,000 is the slight favorite, so we’ll go ahead and pick the minor upset.
Dow Jones will finish the year over 34,000.5 points with odds of -110 at BetOnline (Find out more with our BetOnline Review).
