{"id":38495,"date":"2013-05-22T20:03:51","date_gmt":"2013-05-23T00:03:51","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=38495"},"modified":"2013-05-22T20:03:51","modified_gmt":"2013-05-23T00:03:51","slug":"why-dow-jones-laggards-are-important-leading-indicators","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/05\/22\/why-dow-jones-laggards-are-important-leading-indicators\/","title":{"rendered":"Why Dow Jones Laggards Are Important Leading Indicators"},"content":{"rendered":"

\"Why<\/a>There very well could be more upside in the\u00a0Dow Jones <\/a>Industrial Average.<\/p>\n

Many components have been underperforming the stock market significantly; if there is to be any real economic recovery, these companies should feel it.<\/p>\n

As an index, the Dow Jones Industrial Average seems a little out of date and not particularly reflective of today\u2019s world or the rest of the stock market.<\/p>\n

But regardless, it\u2019s still the global benchmark, and ownership of both the index and component companies is vast.<\/p>\n

Even though Merck & Co., Inc. (NYSE\/MRK) is a great pharmaceutical company (and dividend payer), on the stock market, the position is back to where it was in 1997.<\/p>\n

Another Dow Jones component looking for improvement is Hewlett-Packard Company (NYSE\/HPQ), which has its own specific set of problems.<\/p>\n

Then there\u2019s Alcoa Inc. (NYSE\/AA), which reports early. This\u00a0stock market<\/a>\u00a0laggard is still trading at the same level it was in 1989, taking share splits into consideration.<\/p>\n

And there are several other Dow Jones components that are laggards.<\/p>\n

It\u2019s pretty clear that institutional investors have made a profound bet on the safest blue chips, most evident in January and February.<\/p>\n

While business conditions for a lot of companies are flat, both interest rates and monetary environments remain very accommodative. In addition, there are efforts being made regarding fiscal policies in many important economies.<\/p>\n

China effected a policy to slow its frothy economy and real estate market, and it succeeded.<\/p>\n

So, with many countries trying to get their fiscal affairs in order, the potential for genuine economic growth (in a year or two) is being cultivated.<\/p>\n

If this came to fruition, then laggards within the Dow Jones Industrial Average should improve, and this could help the index with even more capital gains.<\/p>\n

To me, the Dow Jones Transportation Average is an important leading indicator for the U.S. economy. (See \u201cThe Great Big Gamble: Can a Little Earnings Growth Turn into a Lot?<\/a>\u201d)<\/p>\n

But for the long haul, investors are more likely to build positions in component companies of the Dow Jones Industrial Average.<\/p>\n

Without question, this is a very difficult stock market in which to be a buyer. The reaping should almost be finished.<\/p>\n

But if global economic data shows improvement over the coming quarters and the Dow Jones laggards start moving, then this would be a signal that the broader stock market could still go higher.<\/p>\n

As a manufacturer of aluminum, Alcoa is an important leading indicator. Not specifically for the stock market, but for the global economy. Alcoa is one Dow Jones laggard to watch.<\/p>\n

By Abby Joseph<\/strong><\/p>\n

Source –\u00a0http:\/\/www.profitconfidential.com\/stock-market\/why-dow-jones-laggard-is-an-important-leading-indicator\/<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

There very well could be more upside in the\u00a0Dow Jones Industrial Average. Many components have been underperforming the stock market significantly; if there is to be any real economic recovery, these companies should feel it. As an index, the Dow Jones Industrial Average seems a little out of date and not particularly reflective of today\u2019s … <\/p>\n

Continue reading “Why Dow Jones Laggards Are Important Leading Indicators”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-38495","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/38495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=38495"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/38495\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=38495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=38495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=38495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}