Katie Lance
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Katie Lance in Economics & Politics,

Dow 22,000 means the worst is yet to come

The Dow Jones Industrial Average crossed 22,000 on Wednesday, up almost 21% since November’s presidential election. Politicians will claim credit — President Donald Trump certainly has, conveniently forgetting the Dow climbed 400 points in the final two pre-election trading days on confidence that Trump would lose.

But the most important question for your money now is whether this rally in the Dow DJIA, +0.00   stocks and the broader U.S. market will last.

It shouldn’t. There are two big reasons why stock market surges like this end: Either because the economic foundation they are based on changes, usually when a recession hits, or because investors temporarily bid prices up too high. There’s no recession on the horizon. But stocks really are too high. We’ve bet too much on an expansion that is too tepid to warrant it.

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