Subject: Control Panel: DJIA 50,000 and job “deep freeze”
For active links and charts, go to https://discussion.fool.com/t/...

I remember when the DJIA close was announced daily over the radio. I remember hearing that the Dow Jones Industrial Average (DJIA) plunged 508 points to 1,738.74—a staggering 22.6% drop—the largest single- day percentage decline in Wall Street history - on October 19, 1987, while driving for work.

en.wikipedia.org
Black Monday (1987)

Black Monday (also known as Black Tuesday in some parts of the world due to time zone differences) was a global, severe and largely unexpected stock market crash on Monday, October 19, 1987. Worldwide losses were estimated at US$1.71 trillion.[A] The severity sparked fears of extended economic instability or a reprise of the Great Depression. Possible explanations for the initial fall in stock prices include a fear that stocks were significantly overvalued and were certain to undergo a correction... [end quote]

It would have been unthinkable that the DJIA would ever reach 50,000. But it did on Friday.

Here are the stocks in the DJIA.
Corporate Finance Institute
Dow Jones Industrial Average (DJIA)

The Dow Jones Industrial Average (DJIA), also referred to as "Dow Jones” or "the Dow", is one of the most widely-recognized stock market indices.

Est. reading time: 5 minutes

image
image838×1418 112 KB

The DJIA focuses on the industrial side of the economy. It includes IBM, Microsoft, Apple, Intel and Cisco but not Alphabet (Google), Amazon, Nvidia, Netflix or Meta (Facebook). The tech companies whose stock prices have exploded over the past few years are largely NASDAQ stocks. They are included in the S&P 500 index but most are left off of the DJIA.

curvo.eu
Backtesting for the European index investor

Backtest by Curvo is the best backtesting simulator for European index investors. Discover the historical performance of your portfolio and compare it to others.

It’s only recently that the performance of the SPX outperformed the DJIA. But this stunning chart shows how the market has concentrated investment into the NASDAQ 100, especially since 2020.

longtermtrends.com
US Stock Market Indices | LongtermTrends

This chart compares the performance of different US stock market indices, such as the S&P 500, the Dow Jones, the Nasdaq 100, and the Wilshire 5000.

Here is the NASDAQ 100.

slickcharts.com
Nasdaq 100 Companies by Weight

The rise of AI is threatening many tech companies. Investors are moving capital out of these “AI-threatened” tech stocks and into “AI-resistant” sectors like homebuilders, consumer staples (e.g., Dollar Tree, Mondelez), and heavy machinery, which AI cannot physically replace.

Meanwhile, in the real economy, the pace of hiring has slowed.

https://www.wsj.com/economy/jo...

This Is Why It’s So Hard to Find a Job Right Now A ‘deep freeze’ has enveloped the U.S. labor market. A whole bunch of factors are at play. By Justin Lahart, The Wall Street Journal, Feb. 8, 2026 image image1116×896 28.8 KB The pace of hiring in America has dropped precipitously, and there isn’t a single reason why. Instead, there are a lot of them. Tariff policy… High short-term interest rates are another pressure, particularly for smaller firms, which often rely on credit card borrowing to meet financing needs… Workers aren’t leaving the jobs they have. … the bulk of hiring in any given month is replacing people who have left. … As a result, employment has been growing at a glacial pace, with the economy adding the fewest jobs last year, outside of a recession, since 2003. … There simply aren’t as many people to hire. …immigration crackdown…aging population…[end quote]

Still, the economy isn’t in a recession. Growth is still strong. The unemployment rate is still low although it’s gradually creeping up.
fred.stlouisfed.org
Unemployment Rate

Unemployment Rate

The Atlanta Fed’s Latest GDPNow Estimate for 2025:Q3 is 4.2%, a very strong prediction which is slightly below the past months’ but still higher than the “Blue Chip Economists” at about 1%.
atlantafed.org
GDPNow

GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the US Bureau of Economic Analysis.

Economic activity in the manufacturing sector expanded in January for the first time in 12 months, preceded by 26 straight months of contraction, say the nation’s supply executives in the latest ISM® Manufacturing PMI® Report. The Manufacturing PMI® registered 52.6 percent in January, a 4.7-percentage point increase compared to the seasonally adjusted reading of 47.9 percent in December. The overall economy continued in expansion for the 15th month. Backlogs and new export orders are rising. https://www.ismworld.org/suppl... Economic activity in the services sector continued to expand in January, say the nation’s purchasing and supply executives in the latest ISM® Services PMI® Report. The services sector is roughly 80% of GDP. The Prices index has exceeded 60 percent for 14 straight months.

https://www.ismworld.org/suppl...

The Control Panel shows the rotation of market speculators from NASDAQ to industrials. The NAZ100 bullish percent has dropped below 40%, not as precipitous as April 2025 but still more than noise.

The strongest factors impacting the markets are the growing awareness of the vulnerability of the AI bubble (due to immense capital expenditures but uncertain bottom line profits from end users) and the nomination of Kevin Warsh to replace Federal Reserve Chair Jerome Powell.

David Bahnsen wrote an insightful Dividend Cafe about Kevin Warsh.

The Bahnsen Group - Private Wealth Management – 6 Feb 26 All About the Next Fed Chair Kevin Warsh - February 6, 2026 Explore New Fed Chair Kevin Warsh and what matters to investors regarding interest rates and economic impact. …> huge snip<… My belief is that Warsh will attempt to do two things at once: increase shorter-maturity Treasury holdings on the balance sheet to meet the banking system’s liquidity needs, while reducing longer-dated bonds on the balance sheet. … Productivity can and does grow incomes without sparking inflation. Warsh is, in my estimation, one committed to price stability (as all central bankers should be), yet does not make the mistake of confusing productive growth with a threat to the price level… I believe Warsh’s vision is for the Fed to play a smaller role in financial market liquidity and to use deregulation to enable the private sector to do more of this itself. Less stringent capital requirements for banks allow their balance sheets to grow even as the Fed’s balance sheet shrinks. It is a deregulation and sensible capital-reserve tool that can facilitate greater bank lending (assets to banks) without spiking systemic risk, while allowing the Fed to reduce its balance sheet without undermining liquidity… [end quote]

I’m highly skeptical of removing regulations with the belief (hope) that a deregulated system will avoid running the car into the ditch and then calling for a public bailout.

Kevin Warsh is a believer in deregulation. He is a believer that the Fed should not enable deficit spending by Congress by buying Treasury debt (inflating the Fed’s already bloated assets which he wants to reduce). As if Congress is capable of reducing deficit spending. He is a believer that growth that comes from increased productivity is not inflationary (I agree with that). So he thinks that cutting interest rates won’t be inflationary assuming that productivity will increase.

In fact, Labor Productivity is increasing.
fred.stlouisfed.org
Nonfarm Business Sector: Labor Productivity (Output per Hour) for All Workers

There was some flight-so-safety buying last week as the markets backed away from risk. Treasury prices and USD rose. Gold and silver dropped – it’s not clear whether this is a permanently popped bubble that will deflate or whether it’s temporary. The Fear & Greed Index edged downward to low Neutral. Oil continued to rise. Bitcoin continued to fall.

The Chicago Fed’s National Financial Conditions Index (NFCI), which provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets, and the traditional and “shadow” banking systems, shows that financial conditions are still very loose. Margin debt is still climbing above record levels, supporting the market.

The CAPE is still expanding in its historic bubble.

All trends are intact despite noise.

The METAR for next week is partly cloudy. There will be some shifts in the weather but I don’t see a trend change.

Wendy

stockcharts.com
CandleGlance | Free Charts | StockCharts.com

Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
CandleGlance | Free Charts | StockCharts.com

Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
CandleGlance | Free Charts | StockCharts.com

Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
CNN
Fear and Greed Index - Investor Sentiment | CNN

CNN’s Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The index uses seven market indicators to help answer the question: What emotion is driving the market now?
stockcharts.com
Dynamic Yield Curve | Free Charts | StockCharts.com

Visualize the relationship between interest rates and stocks over time using our draggable, interactive yield curve charting tool.
chicagofed.org
National Financial Conditions Index: Current Data - Federal Reserve Bank of...
finra.org
Margin Statistics

Pursuant to FINRA Rule 4521, FINRA member firms carrying margin accounts for customers are required to submit the following customer information: the total of all debit balances in securities margin accounts; and, the total of all free credit...
clevelandfed.org
Inflation Nowcasting

The Federal Reserve Bank of Cleveland provides daily “nowcasts” of inflation for two popular price indexes, the price index for personal consumption expenditures (PCE) and the Consumer Price Index (CPI). These nowcasts give a sense of where inflation...
Multpl
Shiller PE Ratio - Multpl

Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 40.38, a change of +0.78 from previous market close.