For the first time since the creation of the Dow Jones Industrial Average, it ended above 15,999, jumping 109 to 16,010. Why?
- The inflation rate is at 1%.
- Banks therefore are benefited, for they can make money borrowing at short rates and lend at longer rates. Thus, Bank of America jumped 3% to $15.59.
- The number filing new claims for unemployment benefits fell more than expected.
- Producer prices dropped, indicating that inflation pressures remain muted.
- The government shutdown and payroll tax increase did not negatively impact our economy much.
- The Federal Reserve keeps saying (both incoming Chairwoman Janet Yellen and board members) will keep buying bonds to prop up the economy until it can stand on its own. When will this be? Look for a significant correction when this actually happens.