Stock market surges indicate sign of improving economy
As we move into the holiday season the economy appears to be looking better than it has in years.
Monday the Dow hit a record high of over 16,000 points and the S&P 500 also hit record highs.
We sat down with a financial advisor to get an idea of what's behind the surge in stock prices and what it means for your average Montanan.
Frank D'Angelo, a financial advisor with D.A. Davidson & Co. in Missoula, says the Dow Jones Average may be a general representation of economic health but with the S&P 500 also hitting record highs the picture of an improving economy is clearer.
“Typically they go out and continue to spend because they're not as concerned about their income going forward as they were let’s say 4 to 5 years ago,” says D’Angelo. “As the economy improves and more individuals get put to work it expands the income base and that directly affects the economy which affects the markets.”
Financial experts say it all boils down to rising stock prices make consumers feel confident in their purchasing power.
“I think it's pretty obvious if you look around the country that things are getting better and those aren't the only industries that show that,” says Missoula resident Sten Solhberg.
“I think it kind of does show that the big businesses are doing a little bit better, but that doesn't necessarily showcase the smaller businesses very well,” says Missoula resident Brianna Hedrick.
The Dow and S&P 500 aren’t the only stock market indexes that saw improvement today. NASDAQ hit its first high in the last 13 years.
D'Angelo tells us investors are seeing lower returns on bonds, so many are moving money into stocks.
“Interest rates are going to remain low and investors are looking for total return,” says D’Angelo. “I think that it’s important to maintain an investment discipline and stay diversified.”
The Dow hit its record high early Monday morning. By the time the market closed this afternoon it retreated 50 points closing just under 16,000.
With the holiday shopping season yet to come, financial advisors are hopeful the economy will continue to strengthen.