The Dow Jones Industrial Average closed on Friday at its highest rate since the collapse of the mortgage market in 2008. The Nasdaq index, too, closed at levels not seen since December, 2000. Stocks moved to their highest rates in years following positive job growth reports for January that moved the official unemployment rate down to 8.3 percent.
The Labor Department announced today that companies hired 243,000 employees in January – the strongest job growth numbers since April, 2011.
The Dow closed today up 156 points to 12,862 – the highest close since May, 2008.
The Washington Post notes that the service industry expanded at its fastest rate since February, 2011, adding further energy to the economy.
There has been a dearth of good economic news for nearly the last four years, so this boost of economic confidence cannot be understated. However, it’s not all good news out there – The “Q Ratio,” a metric used to evaluate the true value of the stock market, estimates the market to be overvalued by between 33 and 44 percent.
The last time the stock market becomes over valued when there is an inflated bubble that does not reflect market valuations – during the “tech bubble” which burst in the year 2000 and precipitated a mild recession that lasted until 2003, the Q Ratio capped at an overvaluation of 157 percent.
Ah, but why bust up the celebration. Party like its 2007 everyone! t
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