Dow Jones, its full name as Dow Jones Industrial Average, is one of the oldest indices remained in the world. It has always been seeing as the benchmark of stock markets. However, the oldest and authoritative index is suffering quiet lot in the last few months due to the changing economic environment. On 30 June 2022, it had fallen over 16% — close to 5,000 points — to 30,803.44 by the close sharply. Consequently fears mounted quickly that aggressive interest rate hikes by the Federal Reserve (Fed) could trigger a recession. So, what will happen next? Will Dow Jones Industrial Average reverses its recent losses or it is more likely to be further painful before fortunes turn around? Let’s see more about it.
What Is Dow Jones?
Abbreviated as DJIA, Dow Jones is a stock market index made up by 30 prominent companies listed on stock exchanges in the United States. It was first compiled in 1884 by the founder of the Dow Jones Company, Charles Henry Dow, as an arithmetic average stock pricing index. It tracks 30 large, publicly-owned blue-chip companies trading on the New York Stock Exchange (NYSE) and Nasdaq. The Dow Jones is named after Charles Dow and his business partner Edward Jones.
However, perfect and influential as it is, there is still one killing shortcoming remaining, which is statistic insufficiency. Because of the fact that it includes only 30 large companies, many professionals consider it an inadequate representation of the overall U.S. stock market compared to a broader market index such as the S&P 500(500 companies included).
Where Is Dow Jones Going Exactly?
The living is not just hard and laborious on Dow Jones, but the entire stock market is suffering from, what some experts called, minor or mild economic recession. The inflation is burning hot out there.
Current Situation of Dow Jones & Other Indices
In a word to cover this, it is on roller coaster in the past year and it will perform this way. While spending much of this time above 34,000 points, the recent falls mean it’s now trading almost 10% lower than it in June 2021. However, the longer-term performance of the Dow Jones is better than it used to be. As of 1 July, the index has been 44% higher than it was at five years ago.
Goldman Sachs Chief Economist Jan Hatzius stated that the bank does not have a US recession in its baseline forecast. However the fact is remaining in the face of us: US stocks have written their worst half in more than 50 years with the giant of indices S&P 500 fell 0.9% on 30 June, 2022.
Predictions Made by Experts
During the last 24 hours, it goes up 2.43% than it was before.
According to Trading Economics, it suggested Dow Jones could drop to 28246.66 in 12 months. Wallet Investor made predictions that the Dow Jones could be a “not so good long-term (1-year) investment”, for the index would very likely to plunge to 26,790.10 in a year. While some experts suggested the US30 could rebound and trade at 29,419.90 by the end of July. However, no prediction made into the year of 2030.
To dive in some more specific and certain analyses, it shows at some certain points Dow Jones will bounce back and float in small range. And the certain point would be July, 2023. After that, it will go all the way up. Until that point is touched, it probably goes downside little by little.
Keep in mind that analysis’ predictions are here for your reference and your decision to buy in or sell out mainly depends on your attitude to risk, your expertise in the market, the spread of your portfolio. Anyway, to sum up the prediction of Dow Jones, it might go down a bit, hit the bench, and bounce back.