Some thoughts on Nasdaq 9000

FRI, DEC 27, 2019

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF FRI, DEC 27, 2019 • 11:56 ET

DJIA		28693.33
		+0.25%	+71.94

S&P 500		3244.68
		+0.15%	+4.77

NASDAQ		9028.62
		+0.07%	+6.23

EDITOR'S NOTE

There have been plenty of market milestones over the last several years. But the Nasdaq crossing 9000 yesterday for the first time really caught my eye.

Why? That's the kind of number that I still associate more with the Dow than with the Nasdaq. Sure, the Dow first crossed above 10000 twenty years ago. But much like the music you listen to as a teen tends to stick with you for life, I think I'll always deep-down benchmark the Dow to that number--even though it's nearly triple that level today. The Nasdaq, meanwhile, in my mind is still more of a 5K kind of number. 9000? Wow.

These kinds of milestones tend to trigger two kinds of responses in people: some react by chasing them (hey, we should be in stocks!), while others react by running away (IT'S A BUBBLE!!!).

In reality, stocks should trade at higher valuations each decade, so long as evils like inflation and financial crises can be avoided. It always irks me when doomsayers put up charts that make it look like stocks have gone parabolic over the years and need some 50% retracement to get back to "normal." It doesn't work that way! At least not in a growing, dynamic economy.

And by the way, that's why the portrayal of the Elizabeth Warren vs. Leon Cooperman-et-al fight over the stock market also bothers me. Sure, it's the "billionaires" who are "upset" they would "lose money" if the market crashed 25% upon her presidency. But what they're actually worried about is the U.S. economy becoming so much less dynamic and forfeiting so much future growth that companies would immediately become much less valuable. That's how you'd get a major market retracement.

Anyhow, hot streaks like the one the market has been on lately don't last long, either. The Nasdaq is coming off an eleven-session win streak--its longest since 2009! The fourth quarter has been as good for stocks this year as it was bad last year. I won't be nearly as excited to buy stocks (through my 401k) this January as I was a year ago. Fortunately, I still have a pretty long time horizon.

Merry Christmas and I'll see you in 2020--if not sooner ;-)

Kelly

Kelly Evans
@KellyCNBC

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