David Bruining

A Year In The Life Of A Stock Market

A Year In The Life Of A Stock Market

 The stock market: so widely regarded yet so unknown. It’s hard to base President Trump’s success on the stock market if you don’t even know where to begin looking at it.  So here’s a recap of the stock market for fiscal year 2018:

The DOW, or Dow Jones Industrial Average, the most used metric when discussing the action of the stock market.  The DOW consists of 30 giant, publicly traded companies, such as consists of companies such as Apple, IBM, and Disney, and their performance.  There are others – like the NASDAQ, S&P 500, and Russell 2000, – but the DOW is the most commonly used. These indexes are positively correlated on average. Since this past January, the DOW has fallen about 6.7% There are millions of reasons that the market faces volatility, and majority of the time, it has little to do with politics. For example, IBM has a difficult time keeping up with modern technological advances, Apple is uberly expensive, and Disney is just the same.

While the DOW is down on the year, it hit an all time high. The DOW touched 26,952 in the beginning of October.  Basically, this means that the economy is the best it’s ever been in modern history.* Overall, the markets seem to increase at a 45 degree angle no matter what when talking about the long term. But the market has not increased like it has over fiscal year 2017 and 2018 in a long time–at least the past 10 years. The economy started bustling, consumers started buying more, and we Americans became more confident in what we consumed. US retail sales increased over the year, the unemployment rate decreased by more than 1 whole percent, and the national GDP averaged a growth of 3.3 growth per quarter (including 4.2% growth in Q2).  That type of growth seemed virtually impossible at the beginning of 2018–and then it happened.  


This year was the year for tech companies.  Businesses like Advanced Micro Devices, Tesla, Amazon, and Apple have all been making, and remaking, a name for themselves.  Amazon and Apple are the first 2 companies ever to be evaluated at $1 trillion, and Tesla now has the best selling all-electric car in the US.  Tech stocks have been the hottest sector in the market quarter over quarter for the last year-and-a-half.


Not to mention that we were in the longest bull market in history. Congrats, America. The birth of this bull run was on March 9th, 2009–the low of the financial crisis. That day, the S&P 500 blew up over 300% and the DOW almost matched it with a 290% increase. The closest bull market to this year’s was 113 months long, lasting from October 11th, 1990 to March 24th, 2000.

This year has been an amazing year for the American markets and the American people.  It has set a standard for our future. The underlying strength of the economy this year was because of government spending, great earning reports, and an improved confidence in investors.  This year alone has defied conventional markets and turned economists on their head (even when the DOW had its highest single-day point gain in history on December 26th).  As unpredictable the market can be, as rollercoastery as they get, this year may very well go down as one of the most profitable and fruitful in history.  We can only wait and see what 2019 can bring this glorious economy.

*To put this in perspective, from the day President Obama was elected to 2 years in, the DOW increased 2,813 points. President Trump’s 2 years gained 8,957 points.