We saw the DOW top out at 26,000 in February 2018 and then
bounce between 24,000 and 25,000 from February 2018 to May 2018 when it bounced
into the 23,000 to 24,000 range and then bounced back between 24,000 and
25,000.
I don’t expect the DOW to take off and return to its 26,000
high, but it could because of increased investment in the US.
The 30 big, public companies in the DOW did benefit from
the US corporate tax cuts and will report good profits
But the stock market looks at their potential value and
some of the DOW 30 companies are not in good shape. The only safe harbor might
be Charmin toilet paper made by Proctor & Gamble.
The DOW 30 includes companies in healthcare like United
Healthcare, Pfizer, Merck and Johnson & Johnson. Healthcare costs need to
be reduced.
Investment Banks JP Morgan Chase, Goldman Sachs and
Consulting firm IBM are too dependent on big players.
Oil companies Exxon-Mobile and Chevron see their stock
prices bounce along with the oil price roller-coaster.
Credit Cards Visa and American Express are marginal when
compared with MasterCard, owned by Bank of America.
Consumer products Coke, McDonald’s, Disney, Home Depot,
Proctor & Gamble, 3M, Nike, Apple, Travelers Insurance, Verizon and Walmart
are sensitive to consumer buying and are vulnerable to competitors.
Manufacturers Boeing, United Technologies, Caterpillar,
Cisco, Intel, Dow DuPont, Microsoft and General Electric operate in the markets
they have picked.
All of these companies are subject to ups and downs. Many
of their stock prices are down year-to-date.
The DOW 30 is a fragile group and doesn’t deserve the attention it gets
as a measure of US economic health.
Norb Leahy, Dunwoody
GA Tea Party Leader
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