Markets Pass Another Milestone, as Investors Remain Fearless – New York Times

Propelled by enthusiasm for tax cuts, robust corporate earnings and a global economy with few weak spots, the Dow Jones industrial average blew by the 24,000 milestone on Wednesday for the first time.

In a year of stock market records, hitting the 24,000 mark is not the most historic. Yet the ease with which the barrier was cleared — stocks opened the day up 129 points, or 0.54 percent — highlights the extent to which investors are willing to look past political uncertainty and pricey stock valuations and bet that the market will keep going up.

This was the fifth 1,000-point milestone for the Dow this year, first hitting 20,000 on Jan. 25. The latest large round number, 24,000, came barely a month after the previous milestone.

These thresholds have been secured — with the Dow up 21 percent so far this year — with virtually no sharp sell-offs.

This week’s rally was propelled in part because of strong economic signals that show consumer confidence at a nearly 17-year high and promising results from retailers in the thick of the holiday shopping season. And it wasn’t just the Dow. The Standard & Poor’s 500 index hit 2,640 in early afternoon trading on Thursday, and the Nasdaq composite was up 0.8 percent to 6,879.

Market experts say that one of the distinguishing features of this long run, which started in March 2009, is its ability to keep climbing a so-called wall of worry. Investors have suffered numerous frights, such as Britain voting to leave the European Union, geopolitical fears in North Korea and ongoing political turmoil in Washington, but they have jumped back into the market after each stumble.

Ed Yardeni, an independent stock market strategist, has identified 58 of these small panic attacks since 2009. This year, he has not seen a single one.

“This is starting to feel like a melt up,” said Mr. Yardeni, describing a feverish state of a bull market when investors discard all fears. “The market has climbed a wall of worry, but now it seems as if there is nothing to worry about.”

And that, Mr. Yardeni said, is when you have to worry the most. Times like these are when investors, no longer cautious and discerning, are especially vulnerable to negative surprises.

So far this year, there have not been many.

The VIX index, a gauge of expected stock market volatility in the future, was trading on Wednesday at just under 11 — near its recent lows.

The latest missile scare from North Korea, coming after so many previous flare-ups, has been largely ignored.

Instead investors, ranging from sophisticated hedge funds to small retail accounts, have chosen to focus on the tax cut package moving through Congress this week. Its centerpiece is a major reduction in taxes for corporations, which would be a boon to profits — and therefore share prices.

More than anything, investors have been inspired by a global economic boom — encompassing Europe, Asia, emerging markets and the United States — coupled with little sign of inflation.

Traditionally, bull markets come to an end when, after a sustained period of growth, inflation forces central banks to raise interest rates.

Now, with inflation relatively stagnant and the lingering anxieties of the 2008 financial crisis fading, investors are not ready to contemplate the end of the party.

“I used to call my clients fully invested bears,” Mr. Yardeni said. “Now they are giddy bulls — how could they not be?”

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