Dow Jones Index Hits Highest Ever Level
Buying momentum in US stock markets is being underpinned by confidence that central bank stimulus will continue for the foreseeable future.
That confidence helped the Dow Jones record its highest level ever
last night, with the index hitting 14,286 before closing 125 points up at 14,253.
The famous words of former Federal Reserve Chairman Alan Greenspan are reverberating through the markets when he said that investors were suffering from 'irrational exuberance' in the mid-1990s.
At that point, the Dow
was hitting new high after new high, but went on to complete the last major equity bull market that ended with the bursting of the huge technology bubble.
This morning, many investors will be thinking of his words and wondering precisely how much further the current run can go.
Whilst some may believe that 'irrational exuberance' is already upon us, the majority are basking in the glory of easy money, expecting equities to head higher and higher.
The flow of easing has provided some much needed certainty for US companies and so they are reporting some pretty solid corporate earnings.
Of course, investors currently have very few choices as to where to put their money. With low interest rates for bank deposits, poor government bond returns, devalued currencies and a sluggish property market, we could easily see equities
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By Angus Campbell, 6 March 2013