The Dow Jones Industrial Average Of The New Normal: Then And Now | Exploring Markets

The Dow Jones Industrial Average Of The New Normal: Then And Now

The Dow Jones is making new all-time highs. We've seen many rejoice. We've also seen many continue to worry.

This is the New Normal that El-Erian so eloquently speaks of.

The rally will go on as long as Federal Reserve continues to aid the economy. Quantitative Easing and Asset Purchases included. The motto, "don't fight the Fed" has never been so popularized or true as it is today. In addition, Jeffrey Gundlach and Ray Dalio both believe the Fed will continue to support the economy throughout 2013 and even 2014.

From a psychological perspective, the single most important thing to note is that both the bullish and bearish sides are correct. In this market environment one can be overly jubilant and one can also be pessimistic each with fair reasons to support their emotions. The Fed is here to help, thus encouraging the euphoria; the bulls. The economic fundamentals have not changed, or in some cases have gotten worse; the bears.


The Dow Jones Industrial Average In 2007 14164.5 and Now 14260

Regular Gas Price: Then $2.75; Now $3.73

GDP Growth: Then +2.5%; Now +1.6%

Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million

Americans On Food Stamps: Then 26.9 million; Now 47.69 million

Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion

US Debt as a Percentage of GDP: Then ~38%; Now 74.2%

US Deficit (LTM): Then $97 billion; Now $975.6 billion

Total US Debt Outstanding: Then $9.008 trillion; Now $16.43 trillion

US Household Debt: Then $13.5 trillion; Now 12.87 trillion

Labor Force Particpation Rate: Then 65.8%; Now 63.6%

Consumer Confidence: Then 99.5; Now 69.6

S&P Rating of the US: Then AAA; Now AA+

VIX: Then 17.5%; Now 14%

10 Year Treasury Yield: Then 4.64%; Now 1.89%

EURUSD: Then 1.4145; Now 1.3050

Gold: Then $748; Now $1583

NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares