The Dow Just Hit a Record High. It's About Time.

After the Bell Markets U.S. Dollar Ken Berman North America United States M/USD R/NME R/US Barrons.com Barrons Blogs COMP DJIA Dow Jones Industrial Average Nasdaq Composite S&P 500 SPX CODES_REVIEWED After the Bell Markets author Ben Levisohn author|Ben Levisohn author Ben Levisohn id Ben Levisohn name Ben Levisohn topicid 8022 rank 1 topicid barrons_display_brand BARAFBELL barrons_display_brand|BARAFBELL codetype BARRONS_DISPLAY_BRAND name After the Bell source MANUAL value BARAFBELL code BARAFBELL canbedisplaybrand true status modified barrons_display_subject BARMKTS barrons_display_subject|BARMKTS canbedisplaysubject true codetype BARRONS_DISPLAY_SUBJECT name Markets source MANUAL value BARMKTS code BARMKTS status modified cur usd cur|usd codetype cur why about source FACTIVA code usd name U.S. Dollar significance prominent fcode usd onlinesignificance prominent djn R/US djn|R/US codetype djn why about source FACTIVA code r_us name R/US significance prominent fcode R/US onlinesignificance prominent djn R/NME djn|R/NME codetype djn name R/NME why lineage source FACTIVA code r_nme fcode R/NME djn M/USD djn|M/USD codetype djn why about source FACTIVA code m_usd name M/USD significance prominent fcode M/USD onlinesignificance prominent first_publish_headline The Dow Just Hit a Record High — Finally first_publish_headline|The Dow Just Hit a Record High — Finally flow Barrons.com flow|Barrons.com codetype FLOW name Barrons.com source MANUAL value Barrons.com code online status modified name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW source MANUAL title Product code Barrons_Blogs name Barrons Blogs value Barrons Blogs status modified headline The Dow Just Hit a Record High. It’s About Time. headline|The Dow Just Hit a Record High. 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It’s About Time. The Dow Just Hit a Record High. It’s About Time. Dow Jones Industrial Average Hits a Record High. It’s About Time.

The S&P 500 and Nasdaq Composite have been hitting new highs for days now. The Dow finally joined them, after last hitting a new high on Feb. 6. In this market, that feels like a long time to wait.

The Dow Just Hit a Record High. It’s About Time.

The S&P 500 and Nasdaq Composite have been hitting new highs for days now. The Dow finally joined them, after last hitting a new high on Feb. 6. In this market, that feels like a long time to wait.

https://www.barrons.com/articles/dow-jones-industrial-average-gains-a-coronavirus-concerns-fade-51581530238?mod=hp_BRIEF&mod=article_inline https://www.marketwatch.com/story/oil-boosted-as-worries-ease-over-coronavirus-hit-to-crude-demand-2020-02-12 https://www.fxstreet.com/news/usd-jpy-looks-to-end-day-with-modest-gains-near-110-202002121911 https://www.barrons.com/articles/the-dow-jones-industrial-average-dropped-0-002-heres-why-51581460219 https://www.barrons.com/articles/dow-jones-industrial-average-closes-at-fresh-record-51581025954 https://www.barrons.com/articles/european-stocks-are-poised-for-fresh-records-because-of-upbeat-earnings-and-coronavirus-relief-51581503123 mailto:Ben.Levisohn@barrons.com The Dow Just Hit a Record High. It’s About Time. By Ben Levisohn

Flying high. The three main U.S. stock indexes closed at record highs as concerns over the coronavirus outbreak’s economic impact seemed to fade. Crude oil finished higher, as did the U.S. dollar. In today’s After the Bell, we...

...ponder the soaring markets in the U.S.;

...marvel at strength in European stocks;

...and wonder if the strong dollar will ruin the rally.

Dollar Does It

The Dow Jones Industrial Average finally decided to join the fun by hitting a record high on Wednesday. Can anything stop the rally?

The Dow gained 275.08 points, or 0.9%, to 29,551.42, while the S&P 500 rose 0.6% to 3379.45, and the Nasdaq Composite advanced 0.9% to 9725.96. It was the S&P 500’s and Nasdaq Composite’s first new highs since yesterday. It was the Dow’s first new high since, well, Feb. 6.

The U.S.wasn’t the only market flying high. “Stocks had their most bullish session in over a week, as all of the main sectors and even small-caps followed the broader market higher thanks to the improving global sentiment,” writes Gorilla Trades strategist Ken Berman. “European stocks gave a huge pre-market boost to the U.S. market, with several key benchmarks hitting new all-time highs, and bulls continued to push equities higher throughout the session, with all signs pointing to a major risk-on shift.”

Strangely, the U.S. dollar, which often benefits when risk is off, is heading higher. The Dollar Index closed at 99 on Wednesday is more than 2.5 standard deviations above its 50-day moving average, a sign that the greenback is majorly overbought, according to Bespoke Investment Group. A strong dollar, it is said, is bad for the market, and that’s true to a point. “The S&P 500 has tended to underperform in the next week with positive returns less than half of the time,” writes the folks at Bespoke Investment Group. “One, three, and twelve months later, returns are closer to inline with other periods, while stocks have tended towards underperformance six months later. Even if performance has not blown the doors off, the S&P 500 has more often found itself higher rather than lower one year later as well.”

Since 2009, however, the S&P 500 has outperformed handily when the dollar outperforms, as dollar strength indicated not fear but demand for U.S. assets.

Is the same thing happening again?

Write to Ben Levisohn at Ben.Levisohn@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.