US markets hit record high, is the ASX 200 next?

Now that the US Dow Jones Industrial Average has hit 30,000 points for the first time ever, what's in store for the ASX 200?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published November 25, 2020 3:08 pm AEDT

We had some big news overnight. The Dow Jones Industrial Average Index (DJX: .DJI) – the United States' oldest and most famous market index – hit 30,000 points for the first time in history. It ended up closing at 30,046 points this morning (our time). That means the Dow is now up more than 4% year to date, up more than 1.5% from the pre-crash highs we saw in February, and up more than 61% from the lows we saw on 23 March. The other major US indexes – namely the S&P 500 Index (SP: .INX) and the Nasdaq Composite (NASDAQ: .IXIC) – are also at, or very close to, all-time highs themselves.

And, with the exception of the Nasdaq, these indexes don't even include (yet, anyway) the US's highest-flying stock right now, Tesla Inc (NASDAQ: TSLA), which soared another 6.43% last night.

Keep in mind this is all happening in the year of a global pandemic and a nasty worldwide recession.

asx share price boosted by us investment represented by hand waving US flag across winning athlete — Image source: Getty Images

ASX 200 joins the Dow party

Over on the ASX today, the markets are also breaking records. The S&P/ASX 200 Index (ASX: XJO) has today risen another 0.56% to 6,693.20 points at the time of writing, after climbing as high as 6,710 points earlier today. This puts the ASX 200 past the 6,690 point level it began 2020 at, meaning all the losses the onset of the coronavirus pandemic brought to the markets in 2020 have been erased. Yes, the ASX 200 is now up more than 47% from the lows of 23 March.

Sure, the ASX 200 isn't doing quite as well as the US markets have been. We are still around 6.5% off of the February high (and all-time high) of 7,162 points the ASX 200 hit on 20 February, whereas the US has already eclipsed this milestone. But if things keep going the way they have been in November so far (the ASX 200 is up nearly 13% since 30 October), we won't have to wait too long.

So what's driving this rally? As I pontificated last week, the ASX 200 index is heavily influenced by the performance of the big four banks, which make up roughly 20% of the entire index's weighting. Well, Commonwealth Bank of Australia (ASX: CBA) is up more than 18% over the past month, as is Australia and New Zealand Banking Group Ltd (ASX: ANZ). National Australia Bank Ltd (ASX: NAB) is up more than 23% over the same period. Thus, we can probably thank the ASX banking sector for a large part of the ASX 200's success in November so far.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.