The Dow Jones Industrial Average closed above 26,000 for the first time on Wednesday. When it first jumped the 26,000 hurdle during Tuesday's trading, only to fall back at the close, CNN's chief business correspondent Christine Romans somewhat surprisingly noted it.
But as she did, she positively and erroneously spun the market's awful pre-presidential election history in a way that even some conservatives have ignorantly come to accept.
Since Donald Trump's election, the left has consistently claimed that the stock market's performance from its March 2009 low until Election Day was one of continuous advances. Sadly, many people who should know better have come to accept it.
This meme is false.
CNN's Romans appears to know that the left's meme is false. See a Tuesday video segment seen at CNN Money, where they claimed the ascent under Trump is probably an empty "melt up" based on emotion and fear of missing out on gains. As the Dow edged towards 26,000, Romans stated (at the 0:18 mark) that "It took about two years to get from 18,000 to 19,000."
Immediately after that, the following graph appeared:
Note that the left end of CNN's graph showed only the tail-end of the Dow's rise to 19,000, leaving viewers unable to question the accuracy of Romans' "two years to 19,000" statement.
That omission hardly seems to be an accident, given how the Dow really performed during that nearly two-year period (daily rundown from December 2014 to November 2016 is here; original graph is here):
Here's the truth, as seen in the above chart:
- The Dow first hit 18,000 on December 23, 2014. For the next 22 months, it moved sideways or, in two different instances, seriously slumped.
- On November 4, 2016, the Friday before Election Day, it closed below 18,000 for the third consecutive day.
- The Dow moved decisively over 18,000 on Election Eve, November 7, 2016. This time, it never looked back.
- Just 15 days later (11 trading sessions), the Dow topped 19,000, and again never looked back.
- The Dow's rise from 18,000 to 26,000 correlates with the Election Eve hope and then the reality of Donald Trump's presidential election victory, followed by a year of partial implementation of his administration's policies.
It's important to understand the main reason why the Dow had previously been flat for so long.
Though other factor were involved — among them, the drag of Obamacare, anemic growth, other weak economic data, and flat wages — the most important reason the markets went nowhere was that the artificial stimulus of the Federal Reserve's $4 trillion-plus quantitative easing program officially ended in late October 2014.
It took the markets under two months to ascertain that President Barack Obama's economy would stagnate once the Fed took its crutches away. The flatness of the nearly two years before the election also supports the notion that quantitative easing and the federal government's unprecedented budget deficits artificially pushed the markets up during their 5-year, 9-month rise from March 2009 to December 2014.
Thus, there absolutely no basis for claiming that the Trump-era stock market rally owes any of its momentum to his predecessor.
It's long past time that center-right media outlets proclaim this obvious truth, and abandon the left's false "continuously rising" Obama-era meme.
Cross-posted at BizzyBlog.com.