So Donald Trump was elected and the financial world didn’t fall apart. Not yet anyway. In fact, the markets are soaring. The S&P 500 and Nasdaq have hit record highs in the weeks since the presidential election. The Dow Industrial Average closed above 19,000 for the first time ever last week—a milestone that some traders helpfully broadcast via novelty headwear.
Dow baseball caps are a tradition at the New York Stock Exchange—one that goes back nearly two decades. Some may still wear them in earnest, but I find they’re best appreciated as a wearable form of gallows humor.
Back in March 1999, as the Dow approached the 10,000 mark for the first time, New York Stock Exchange officials ordered thousands of dark blue baseball caps with “Dow 10,000” stitched across the front. It was an auspicious moment for the U.S. economy—and one that seemed to match the broader cultural buoyancy at the dawning of a new millennium.
Even outside of financial circles, Americans were captivated by the Dow as it approached the five-figure mark. “It is the millennial feeling of Dow 10,000—rather than any intrinsic interest in stocks or even money—that has caught the attention of some New Yorkers,” The New York Times reported in 1999. That “millennial feeling” was one of enormous optimism about the future. The United States was in year 17 of a bull market, the best economy in a generation. There was a sense that investing had been democratized—by a gangbusters market that made it seem easy for anyone to rake in money, but also by the fledgling internet (and new-fangled online platforms like E-Trade) that made trading possible for the every person (at least in theory), without the help of a fancy broker.
It had taken just four years for the Dow to rocket from 4,000 to 10,000, and the S&P 500’s annual return during that time was a stupefying 28 percent. (That’s quite high. Typically, the annual return hovers around 10 percent, on average.)
The people who could afford to invest anything in the first place were giddy with the promise of ongoing prosperity, a trajectory that “Dow 10,000” came to represent. (Approaching the milestone was not without its jittery moments: On three occasions in March 1999 the Dow crossed the 10,000 threshold during trading but fell back down below the marker before the closing bell. At one point, the blue caps were “hauled onto the trading floor... only to be dragged off again when final calculations showed that the index was three points under the magic number,” the Times wrote in 1999.)
Finally, on March 29, 1999, it happened.
The Dow closed above 10,000. And when it did, Rudy Giuliani, who was then the mayor of New York City, and Richard Grasso, the NYSE chairman at the time, tossed armfuls of the specially made baseball caps to jubilant traders cheering on the floor. “They rained them down on everybody,” Bernie McSherry, a longtime market watcher who was on the floor at the time told The Wall Street Journal a decade later. “That 10,000 number was just something that was beyond the imagination for a long time.”
And then, it wasn’t. Just five weeks later, the Dow toppled 11,000. A headline in the Times practically shrugged at the news: “Another Record For the Dow. (Ho Hum).”
There’s nothing magic about the Dow hitting 10,000—or 11,000, or 15,000, or 19,000 for that matter. The number is just a calculation based on the sum of stocks from 30 major companies like Coca-Cola, General Electric, Johnson & Johnson, Nike, and Walt Disney. Yet reaching Dow milestones has long held a psychological significance among traders. Looking back, 10,000 still stands out as a particularly meaningful turning point. “The Dow at 10,000 is not only a testament to the profound economic change that has swept the U.S. over the last two decades,” The Los Angeles Times wrote in 1999, “but also a reflection of how many millions of Americans pinned their financial hopes to the stock market.”
“Ten thousand is kind of scary,” J. P. Sipp, a lawyer from Staten Island, told The New York Times in 1999. “I have a feeling that things can’t stay this prosperous much longer.”
He was right.
First, the dotcom bubble burst. Then, the housing market crashed. (And between those two economic catastrophes, 9/11 happened.) Over a period of about eight years—from March 2000 to September 2008—that “millennial feeling” of American optimism didn’t just fade, it evaporated. Traders didn’t ditch the baseball hats entirely, but they did modify them to match the dark mood of a new economic and cultural reality. I like the approach favored by the trader Mark Feeley, who transformed his “Dow 10,000” cap into a “Dow 8,000” cap in 2002:
It took more than seven years for the Dow record to creep up from 11,000 to 12,000, a milestone reached in 2006. The Dow first crossed the 14,000 mark in 2007. After that, it cratered to near 6,000 in 2009. With fits and starts, the market bounced back. In 2013, when the Dow crossed the 15,000 mark, the celebratory hats returned. Some may still wear them in earnest, but I find they’re best appreciated as a wearable form of gallows humor.
In 2016, Dow milestone hats are a throwback to a simpler time, and a reminder that the Dow—even at new heights—isn’t what it used to be, as plenty of market trackers will argue. In postwar America, when “everyone’s income tended to move in the same direction,” as the economics reporter Adam Davidson wrote in a 2012 essay, the Dow was a solid indicator of the nation’s economic health. But even by the time the Dow was teetering toward the 10,000 mark in the late 1990s, it was mostly a game in which a few investors could make fortunes. The pre-crash tech-driven market peaks of the 1990s “hid a historic fracturing,” Davidson wrote. “One lucky group, enriched in part by the instant wealth of the bubble, saw its income grow faster than ever while the middle and lower classes’ share of national income was declining.” Within two decades’ time, those same dynamics would result in a hat of their own: an all-too-familiar red cap emblazoned with yet another dream of prosperity, one that promises to make America great again.
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