Record Year for Stock Market

posted by iHeartMedia’s Corey Olson -

2017 has been the year of the bulls on Wall Street, and new figures show it is now the best year ever for the stock market.  With less than two weeks remaining in the year, the Dow Jones Industrial Average is set to gain over 5,000 points this year.  That easily surpasses the previous best annual point gain, 3,472 in 2013.  As of this week, the Dow has notched 70 record closes this year, also a first.  On a percentage basis, the Dow is up over 25 percent for the year, while the Nasdaq has added nearly 30 percent and the S&P 500 has grown by more than 20 percent.

"Wow," says Clark Hodges, financial strategist with Hodges Capital, when presented with the numbers.  "(The market) has basically gone straight up this year, there has been really no pullback, so I'm very, very surprised and smiling at the same time." 

Hodges tells KTRH that this is uncharted territory for the stock market.  "It's unheard of to have a market that moves up and virtually never pulls back by even five percent during the year...we haven't had a five percent pullback in over a year," he says.

As for what lies ahead in 2018, the GOP tax reform bill that's expected to be signed into law by President Trump within days will likely mean more growth.  "Stock prices, by and large, will make a move based on their earnings, and you've gotta believe that every company is going to earn more money by paying less taxes," says Hodges.  The bill cuts the corporate tax rate from 35 percent to 21 percent.  "You could also argue that the long-term future for companies in the United States is very good, because they're going to earn more money going forward," says Hodges.

Overall, Hodges expects 2018 to see more modest, broad-based growth in the markets, rather than the boom of 2017.  "I don't expect the same kind of year," he says.  "I expect more of a normalized trading year."