Remember when the Bee Gees’ Stayin’ Alive was the biggest hit on the radio? If so, you were about the last time the Dow Jones Industrial Average had a nine-day losing streak, which was reached on Tuesday.
The only exchange-traded fund that tracks the oldest stock market benchmark, the SPDR Dow Jones Industrial Average ETF (DIA)The index fell another 2.6% on Wednesday on inflation concerns, extending the longest streak of consecutive losses for the index since 1978.
Several factors contributed to the December recession.
In the immediate rear view, there is a big build-up to the post-election election. For the month ending December 5, the start of the Dow Jones’ nearly 47-year losing streak, the DIA rose nearly 7%. This strong near-term performance, which represents almost a third of year-to-date profits, may seem exaggerated to many investors who tend to lock in their gains by selling stocks ahead of an uncertain new year.
The Fed’s revised Summary of Economic Projections (or dot plot) now anticipates two rate cuts next year, fewer than the three forecast in September, while inflation estimates have been revised higher.
Looking ahead, the incoming Trump administration’s policies, including potential tariffs and tax cuts, in addition to the Fed’s lower interest rate projections, have heightened inflation concerns.
The Dow Jones Industrial Average (DJIA) is a stock market index that tracks the performance of 30 major publicly traded companies in the United States. These companies span several sectors, excluding transportation and utilities, and provide a snapshot of the overall health of the U.S. economy.
Unlike other indexes, the DJIA is price-weighted, meaning companies with higher share prices have a greater influence on the index’s movements. It is often used as a measure of market performance and investor sentiment.
The DIA ETF is designed to mirror the performance of the DJIA. By purchasing DIA stock, investors essentially own a portfolio representing the 30 stocks in the DJIA. This allows investors to gain exposure to the DJIA’s overall performance without having to buy each individual stock.
DIA is structured to provide liquidity and ease of trading, making it a popular choice for both long-term investors and short-term traders. Additionally, the DIA ETF pays dividends because it passes on the dividend income from the stocks it holds. This makes it an efficient way for investors to participate in the performance of the Dow Jones while taking advantage of its income potential.
