5 milestones from 2017 that mattered to investors
From Bitcoin mania to the Dow’s rapid rise, it was a frenzied year
It was a year of head-turning milestones in the financial world. Here are five landmark moments on Wall Street that made front-page news in 2017 and captured the public’s imagination:
Dow power
Blue-chip stocks in the Dow barreled through
1,000-point milestones at the most prolific pace in its
121-year history. The first landmark the 30-stock index passed was 20,000, which came amid great fanfare in January, five days after President Trump took office. Dow 21K, 22K, 23K and 24K weren’t far behind. The Dow Jones industrial average now sits less than
350 points below 25,000, and is up 25% for the year after notching 69 record highs. The buzz on Wall Street is that more records and milestones are ahead in 2018. “Twenty-five thousand is too close, and no one sees that as a ceiling,” says Chris Rupkey, chief financial economist at MUFG, a New York-based bank. Dow 30K anyone?
Tesla’s electric run-up
In April, the electric car maker led by visionary CEO Elon Musk did the unimaginable: It briefly overtook General Motors as the most valuable U.S. auto company, based on stock market value. Climbing to No. 1 less than seven years after it started selling shares to the public, Tesla showed Detroit and the auto industry that electric-powered cars and driverless vehicles could be the future. Tesla’s current market value of $57.7 billion trails GM by roughly $500 million. Will the innovative and disruptive auto company — which recently said it would make an electric semi for truckers — regain the No. 1 spot in 2018? Not if auto analysts are right. They have an average price target of $305.55 for Tesla shares, 11% below current levels. In contrast, GM’s stock is projected to rise 15%.
Apple: First stock worth $900B
In early November, the iPhone maker and world’s most valuable company became the first U.S. stock to reach a market value of $900 billion. The success of the iPhone X, and a big investment and endorsement from billionaire Warren Buffett, propelled Apple shares to a 50% gain in a year in which tech is the stock market’s top-performing industry. The countdown to a $1 trillion market cap for CEO Tim Cook’s company has begun. For Apple to become the first “trillion-dollar stock,” its shares, which closed Friday at $173.87, would have to climb 12% to roughly $195.
Bitcoin mania
Bitcoin, the digital currency often derided as a fad, a fraud and a bubble, moved ever closer to the investment mainstream after wowing investors, Bitcoin believers and speculators with gains of more than 1,700%. The meteoric rise of the world’s best-known and most highly-valued cryptocurrency has caught the attention of Wall Street, which has rushed to find ways to profit from the emerging and mysterious asset. In a sign that widespread acceptance may be coming, roughly five dozen hedge funds now specialize in cryptocurrency investing; two major exchanges have launched Bitcoin futures trading; and many investment firms are rushing to get approval for index funds and exchange traded funds to make it easier for mom-and-pop investors to gain access to this
new investment. Wall Street is split on whether the Bitcoin boom will continue in the new year.
$1,000-stock club
It’s a select group, and both Amazon and Google-parent Alphabet joined the “$1,000 Stock Club” this year. The two tech stocks have joined Priceline as the only ones in the S&P 500 stock index with share prices above $1,000. Amazon, whose shares are up 57%, has cemented its reputation as the king of online retailing, and is aggressively moving into new businesses such as groceries and health care. Google, which is up 35%, continues to dominate the digital advertising business. If Amazon and Google want to remain in this upper tier, they would have to avoid stock market declines of roughly 15% and 7%, respectively.