The Dow is riding its longest winning streak since 2017. Here's why
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The Dow Jones Industrial Average just won't stop going higher it seems like. What is behind this historical momentum for the blue chip measure created more than a century ago?
The Dow on Tuesday rose for a 12th straight day, matching its longest winning streak since 2017. If it closes higher Wednesday, it would be a streak not seen since 1987, when the Dow advanced for 13 sessions in a row. During this latest run, the Dow has outperformed, gaining 6%.
That momentum hasn't been seen in the broader S&P 500 and Nasdaq Composite indexes, however. Both are up just 3% since the Dow's streak began. The S&P 500 has fallen twice in that time, while the Nasdaq has posted three losing sessions.
There are several reasons for the Dow's streak, but none may be bigger than recession fears easing.
«So far, there's no evidence of a recession. So as long as there's no evidence of recession… I think the market will probably continue to melt up; people are chasing,» Steve Eisman, senior portfolio manager at Neuberger Berman, told CNBC's «Squawk Box» earlier this week. Eisman rose to prominence for profiting from the subprime mortgage crisis. He was profiled in Michael Lewis' book «The Big Short.»
Recession fears are easing in large part due to data showing inflation is coming down.
Near the start of the Dow's winning streak, the consumer price index, a widely used measure of inflation that tracks prices on goods ranging from food to electronics, rose just 3% on a year-over-year basis. That was less than economists expected. the next day, the producer price index, which gauges what wholesalers pay for raw goods, climbed just 0.1% in June month over month, also less than forecast.
On top of that, employment data points to a
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