The stock market always has it’s ups and downs; but, for those who are bullish in the stock market, or those investing for the economy, it’s been a good couple of days. The S&P 500 has reached a record $2003 in the past 2 trading days and it seems like America is recovering from a slow couple of months.
What is the S&P 500 and What is its Significance?
The Standard & Poor 500, also known as the S&P 500, is a stock index that uses the top 500 companies in the United States and averages them out into one index that reflects the condition of America’s economy. Indexes like this include the Dow Jones Industrial Average, an index that combines the top 30 “blue-chip” stocks in the US, and the NASDAQ, an electronic stock market that works around the US. As displayed in the charts below, the indexes seem to be in good shape and that just means that America is doing well.
The chart above presents the state of the top 3 indexes since June 26th, 2014 until August 26th, 2014. The indexes have shown consistent improvement with the S&P 500 jumping almost 2.5% since June 26th, the NASDAQ improving 5%, and the Dow Jones rising about 2%. All in all, this chart shows that investors are becoming confident about the United States once again and that companies are working harder than ever to boost sales and profits. Analysts state that companies are putting a lot of money into mergers like the Apple and Beats Headphones merger and the Burger King and Tim Hortons merger which is enticing investors to believe in these companies and invest in them. New data revealed in August points to strong economic growth, a strong earnings season, and low interest rates, which has brought more and more people to invest in America once again.
The stock market currently seems like it’s having a bullish season but will it continue to grow or is a recession looming in our future? In the scheme of things, bearish investors, or those investing against the economy, know that prices fluctuate and that companies will continue to work but there is always a drop that comes around every now and then. With the advancement of the economy now, the fact still remains that America is under trillions of dollars of debt and that America is also having trouble maintaining foreign relations. The question still remains but let’s enjoy it while we can.