The Dow Jones Industrial Average is on pace to do something it hasn’t done in almost 50 years.
Transcript:
Conway Gittens: Investors have consumer and factory data to digest this Tuesday. Retail sales jumped 0.7 percent in November, the stronger-than-expected reading hints at consumer strength heading into the key holiday shopping season. Meanwhile, industrial production dropped for a third straight month, led by falling output at mines and utilities.
Tuesday’s data adds to a murky outlook for the Federal Reserve, putting the Dow on track for its longest losing streak since the 1970s. The Dow has been down every day since December 4th, when it closed above 45,000 for the first time ever.
Investors are certain the Federal Reserve will deliver its final interest rate cut of 2024 at a meeting this week. Market participants, however, are less certain on how many rate cuts to expect in 2025.
On one hand, the jobs market is softening and the Fed wants to avoid the kind of massive layoffs that lend to a recession – that suggests more rate cuts. But on the other hand, the American consumer is looking healthy as indicated by those retail sales numbers and inflation is heating up again -that suggests the Fed needs to cool off on the rate cuts to prevent the economy from overheating.
It’s not just uncertainty about the Fed and interest rates that has the Dow in a historic slump. Nvidia, the darling of the AI revolution, is in a slump of its own. That AI chip stock is now in correction territory – meaning it has fallen at least 10 percent from its recent highs. The timing couldn’t be worse – since it just became a Dow stock in November.
Dow historic slump aside, the stock market is on track for another banner year. Year-to-date the Dow is up 15 percent, the S&P 500 is up 27 percent, and the Nasdaq is up 34 percent.
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