Why the Dow Index Could Continue the Upward Momentum

The Dow Jones Industrial Average is
one of the oldest indices in the world. It is also one of the most
closely-followed indices in the world. This is because of its size and the
importance of the companies that make it. These companies have a combined
market capitalization of more than $7 trillion. They include companies like
Apple, Boeing, and Caterpillar among others.

This year, the Dow index has been
one of the best-performing indices, gaining by more than 7%. This upward surge
came after the large dip that happened in December when the index reached a low
of $21683. Yesterday, the index ended the day at $24,425 as investors cheered
the ongoing trade talks. Investors have largely been satisfied by the
just-concluded earnings season and the forward guidance. They have also cheered
the new stand by the Federal Reserve, which has turned dovish. Indeed, part of
the reason why the Dow reached a low in December was because of the fear of
higher interest rates.

This week, eyes are focused on
the government shutdown and the trade talks between United States and China.
Yesterday, Trump said that he was disappointed with the compromise deal made
between congressional democrats and republicans. He however opened chances of a
compromise as well. On trade, he said that he was open to extending the March 1
deadline. If he does this, it may be a signal that the negotiations are making
progress.

In case of a deal between the two
countries, there is a likelihood that the index will continue with the winning
streak. If this happens, the index could test the previous high of almost
$27000.

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