Buoyed by figures from Goldman Sachs, UnitedHealth and Johnson & Johnson the Dow Jones industrial average index is within touching distance of the 23,000 level. An additional 16 point rise on the bell took the market to a record intraday high although many believe the 23,000 level is only hours away. When you bear in mind the market first closed above the 22,000 level on 2 August 2017, this rise has been brutal and seems to be never-ending.
UnitedHealth
Figures from UnitedHealth were stronger than expected nudging the company and analysts to raise full-year forecasts. Interestingly there has been growth across the whole array of UnitedHealth business operations and the shares were up 5.1% in early trade. What is becoming blatantly obvious is that general improvements in trading are spread right across the US business spectrum which is giving investors more confidence going forward.
Johnson & Johnson
Johnson & Johnson also surprised analysts on the upside with particular growth in the company’s pharmaceutical business. Recent acquisitions such as Actelion and an array of other businesses have bedded down very quickly and will help the company to push profits forward in the foreseeable future. The company has an array of different operations and while the pharmaceutical business may be the current driver, analysts and investors believe there is potential for further growth right across the board.
Goldman Sachs
Initially Goldman Sachs shares were marked higher after reporting better-than-expected third-quarter earnings and revenue. Fixed income trading revenue totalled $1.45 billion and while this was a 26% reduction year-on-year it was better than the highest analyst expectations of $1.38 billion. Even though Goldman Sachs was expected to announce strong figures, bearing in mind the strength of stock markets, the company still managed to surprise on the upside.
Analysts reviewing forecasts
While the above three companies have helped to support markets in the short term and push the Dow Jones industrial average indexed towards the 23,000 level, there are many other companies which have also surprised on the upside. In many ways analysts have been waiting for the markets to “trip up” but any short-term setback over the last 12 months has been seen by many investors as a buying opportunity. So, while markets have been volatile at times, the general consensus seems to be that the economy is growing and prospects for the short to medium term are even improving.
This is all happening against a very difficult political backdrop with Donald Trump alienating many previous allies and causing ructions across the world. While the threat of immediate conflict with North Korea may have faded, it looks as though Iraq and Iran could feature prominently in the future.
Summary
While many analysts seem to be willing markets to fall they keep on pushing further and further ahead. The Dow Jones industrial average is now in touching distance of the 23,000 level having hit an intraday record high earlier today. Traditional valuation methods seem to suggest markets may be overstretched but set against low interest rates many experts believe there are still large tranches of funds waiting to be invested. So, in the short to medium term prospects appear extremely positive for the US but with Donald Trump on the scene, anything could happen!