Dow Jones Industrial Average DJIA: March, 2009 low, 6,469.95; Dec. 23, 2013 high, 16,360.60

It seems a safe bet that the DJIA will top 16,469.95 by March 2014 so in round numbers, the DJIA has climbed 10,000 points in five years. Are we all rich yet? That’s a particularly sparkling performance compared to the anemic annual economic growth of about 2 percent per year, one of the weakest ever after a recession.
But history is behind us. What is likely to lay ahead, no point in any rear view mirror thinking at this point.
The Political Landscape
Max Baucus appointment as the Ambassador to China closes the door on any sort of tax reform. He has headed the Senate Finance Committee and the Joint Senate House Committee on Taxation. The administration has removed the chance to lower the highest corporate tax rate in the world, ours at 35 percent, from the discussion. Republicans expecting that Obamacare will implode to their benefit will have to work to make that happen. Socialist central planners, who now occupy the administration ranks, never admit failure. Kathleen Sebelius stares into cameras denying anything is wrong.
LBJ’s Great Society was supposed to abolish poverty but we now learn there are more impoverished Americans than ever. Gorbachev in Russia, Chavez in Venezuela and Kirchner in Argentina all preside or presided over economic catastrophes—but none took real steps to emulate successful capitalist economies. Have the Castro Brothers ever relented from their socialist utopia fantasies? So expect more job killing regulation and the fix of the week for the re-make of one sixth of the economy.
All of this brings uncertainty, which markets do not like. Expect full time employment growth to be on hold in the mean time.
I suspect the decision to lead from behind in Syria, allowing Assad to stay in power, will have far more consequences than the administration realizes. Already Iran rejects parts of the recent agreement. Saudi and Israel find themselves as uneasy partners, China punches authoritative policy out past the island chain to its southeast and North Korea is as belligerent as ever.
Stock Market
There are two views. One is that we are in a new secular bull market sayeth John Murphy at stockcharts.com. Indexes reach higher every day, confirming the end of the 2000-2013 bear market. The other view is that stock market value has reached another bubble type top. The value of U.S. Equities was 234 percent of annualized household after-tax income. That level has only been surpassed during the dot.com boom and is nearly twice the average since 1950. There are of course many additional arguments on each side but these two are representative of the two camps.
Social mood swings from the negative, March 2009, to the positive, today, 10,000 points later. The argument is that the Fed stimulus has simply pumped up the stock market. Internal indicators such as net new highs have contracted since April/May of this year. We see more evidence of negative social mood from displeasure with the president to the latest Duck Dynasty brouhaha.
But more evidence of increasing economic strength is at hand—auto sales, for example continue to expand, manufacturing is on the increase. I don’t think the alternating 18-year cycle of booms and busts has been repealed but I admit it is harder to make that case with each market high.
Interest Rates
Ten-year government bond rates have doubled from 1.5 percent in August 2012 to 3 percent today. Rates are on the rise. I doubt Janet Yellen is as much in charge as she expects. A surprise here is that rates might rise to 44.5-6 percent in the next 18 months. REIT and municipal bond prices have fallen but are rising for the time being.
Oil Prices
Crude Oil is trading right on its 200 day moving average of $98.86. Impending strength in the U.S. dollar is holding it back from further gains. Still, I expect oil can buck the trend of performing opposite the dollar and move higher into February.
Gold and Silver
These finish the year, down from $1,800 in 2012 to $1,200 today, for a 33 percent loss. To date there is no sign of a bottom here. The gold miners continue to fall.

Follow Dennis at www.themarketperspective.com.