Thirty years ago today, the Dow Jones industrial average plunged 22.6%, leading to what many called Black Monday. It was and remains the worst single session in Wall Street history.
Those days are far behind Wall Street. Despite a range of concerning conditions, such as tensions with North Korea and stock market disruptions following a particularly devastating hurricane season, the Dow broke a new record Wednesday, closing above 23,000 for the first time ever.
This marks the fourth thousand-point milestone for the Dow this year, painting a very different picture than what was seen in 1987. According to The Wall Street Journal, the Dow had never before hit more than two of these milestones in a year. The OECD even anticipates that all of the 45 economies it analyzes will grow this year for the first time in a decade.
However, some fear that the unprecedented growth could be the marker of bad times to come. CBS Moneywatch points to big-cap stocks like Facebook (fb) and Google (googl) drifting lower, while the Dow is “at its second-most overbought condition in 22 years.” It highlights a Societe Generale analysis that “stocks have entered a ‘dangerous’ volatility-free situation with nearly nonexistent expectations of a market sell-off or correction.”
For its part, The Wall Street Journal notes that the stock market plunge of Black Monday quickly spread across the globe, and stresses that the global markets have only become even more interconnected today. CNBC, on the other hand, has a more optimistic reading of current conditions, pointing out that today’s market growth is more moderate and stable than in the run up leading to Black Monday.
Only time will tell if we have another crash ahead of us. But in the meantime, investors seem to think that skepticism and caution may be just what we need to avoid one.