DOCSLIB.ORG

Chapter Four Stock Market Indexes New Investors May Be Confused

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Chapter Four Stock Market Indexes New Investors May Be Confused Chapter Four Stock Market Indexes New investors may be confused about marketplaces such as NYSE, AMEX or even NASDAQ (as a quotation system or market place) where securities are traded and indices such as Dow Jones, S&P 5000, or again NASDAQ (as an index). This chapter will deal with the three most referred indices which are the Dow Jones Index, also called Dow Jones Industrial Average, the Standards & Poors 500 or S&P500 and the NASDAQ Composite Index. The Dow Jones Index In 1882, to satisfy the growing need of financial information, Charles Henry Dow, Edward Davis Jones and Charles Milford Bergstresser founded Dow, Jones & Company in a small basement located at 15 Wall Street in New York. The company started as a financial media producing hand-written bulletins called “flimsies” which were delivered to the Wall Street’s subscribers in the area. The official Dow Jones Indexes and Averages were created in 1884 by Charles Dow comprising of the sum of prices of 11 stocks. Among those stocks were nine railroads and two industrial companies. Little they knew that more than a hundred years later, the term “Dow Jones” has becoming the most watched index and the compass of all stock markets worldwide. On July 8, 1889 Dow Jones & Company’s “Customers’ Afternoon Letter” changed its name to the Wall Street Journal until today. In 1897, the number of the Dow Jones stocks grew to 20 railroads companies and the same year, Charles Jones created the Dow Jones Industrial Index composing of 12 companies outside of the railroad industry. Nowadays, the Dow Jones Indexes encompasses a host of different indexes but the three most important indexes are the Dow Jones Industrial Average, the Dow Jones Transportation Average and the Dow Jones Utility Average. Among those three, the most referred is by far the Dow Jones Industrial Average or simply the Dow Jones. The list of Dow Jones is actually 30 companies (on 09/20/2013): Company Ticker Industry Date entered 3M MMM Diversified 08/09/1976 American Express AXP Financial 08/30/1982 AT&T T Telecommunication 11/01/1999 (SBC) Boeing BA Aerospace 03/12/1987 Caterpillar CAT Construction & Mining 05/06/1991 Chevron CVX Oil & Gas 02/19/2008 Cisco CSCO Technology 06/08/2006 Travelers TRV Financial 06/08/2009 - 21 - Coca Cola KO Beverages 03/12/1987 Du Pont DD Commodity chemicals 11/20/1935 Exxon Mobil XOM Oil & Gas 10/01/1928 General Electric GE Conglomerate 11/01/1907 Goldman Sachs GS Banking, Financial 09/20/2013 Home Depot HD Home Improvement 11/01/1999 Intel INTC Semiconductors 11/01/1999 IBM IBM Computer 06/29/1979 Johnson & Johnson JNJ Pharmaceuticals 03/17/1997 JP Morgan Chase JPM Financial 05/06/1991 Mc Donald’s MCD Fast Foods 10/30/1985 Merck MRK Pharmaceuticals 06/09/1979 Microsoft MSFT Software 11/01/1999 Nike NKE Apparel 09/20/2013 Pfizer PFE Pharmaceuticals 04/08/2004 Proctor & Gamble PG Household Products 05/26/1932 United Health Group UNH Managed Health Care 09/24/2012 United Technologies UTX Aerospace, 03/14/1939 Cor. heating/cooling Verizon VZ Telecommunication 04/08/2004 Communications Visa V Consumer Banking 09/20/2013 Walmart WMT Retailers 03/17/1997 Walt Disney DIS Entertainment 05/06/1991 Components of Dow Jones are occasionally changed when the market conditions vary. The scale factor used to calculate Dow Jones index is adjusted in order for the value of the average is not affected by the modification. For example, on November 1, 1999 four companies Chevron, Good Year, Sears, and Union carbide were removed and replaced by Intel, Microsoft, Home Depot and SBC. Intel and Microsoft are the first two companies traded on NASDAQ exchange to be included into the Dow 30. This information illustrates the fact that Dow Jones is an index and its components can be traded on different exchanges. Case-in-point: Intel is traded mostly on NASDAQ (as a market place) but is a component of Dow Jones, S&P 500, NASDAQ Composite and NASDAQ 100 indices. - 22 - Charles Dow and Edward Jones The S&P 500 Index For years, the Dow Jones Index has proven to be an accurate predictor of primary market trends but it has faced mounting criticism that it does not embody an exact outlook of the economy in general. Its limited number of companies and most of all, its price-weighted methodology has made analysts uneasy. A wild price’s move of a single Dow’s component may affect the whole index. Because of the above reasons, Standard & Poor’s, a division of McGraw- Hill Company has come up with the S&P 500, a value-weighted index published since 1957 of 500 large companies traded actively in the United States, either on NYSE or NASDAQ. History of S&P 500 goes back in 1923 when Standard & Poor’s develops its first stock market indicators. In 1926 the “S&P 90” was created, based on 90 stocks comprising of 50 Industrial, 20 Railroad, and 20 Utility companies. By 1957, the number of components grew to the actual 500 stocks, comprising of 400 Industrials, 40 Utilities, 40 Financials and 20 Transportations. Unlike Dow Jones Index which is price-weighed, meaning the price of a specific stock has direct influence to the index, S&P 500 is value-weighted. The market capitalization of a stock, not solely the stock price of a company, impacts proportionally the index performance. In 1968, S&P 500 received somewhat an official recognition when the U.S Department of Commerce has chosen the S&P 500 Index as one of the components of its Index of Leading Economic Indicators. Likewise, nowadays, investment professionals use S&P 500, which they call the “market” as a benchmark for mutual funds’ performance. The volatility, or portfolio beta of S&P - 23 - 500 has been attributed arbitrary a value of 1.00 against which other indexes or stocks are calculated. S&P 500 Index is managed by a committee who establishes policy guidelines for all S&P Indexes. Typically, the Committee meets about every month, and as often as necessary to discuss about policies, companies reviews and most important, potential replacements of the Index components. Since the Index has been widely used as a basis for other equity markets, replacements may have a significant impact on the market in general, a consequence that the Committee wants to avoid as much as possible. Any company cannot apply for inclusion into the S&P 500 nor does the Committee approach candidates for consideration. All data used in the selection process is public information and the Committee guarded closely its changes and released publicly only when the markets are closed. Nonetheless, such procedures still affect the markets, therefore whenever possible, the Committee announces company replacements up to a week in advance. The current complete list of S&P 500 can be found at: http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices _500/2,3,2,2,0,0,0,0,0,2,3,0,0,0,0,0.html - 24 - The NASDAQ Composite Index Along with Dow Jones and S&P 500, the NASDAQ Composite is the third most watched Index which captures the performance of technology and growth companies of the stock market. The NASDAQ Composite Index comprises of both U.S. and non-U.S. companies and is not exclusively a U.S. Index. The NASDAQ Composite Index originates back in 1971 when the NASDAQ Exchange was created. Although most of the securities listed in the Index are common stocks, it includes also a number of American Depository Receipts, Real Estate Investment Trusts (EITS), and Tracking stocks. As such, its components add up to more than 3,000 securities. The methodology used to calculate is market-value weighted, like the S&P 500, therefore, stocks with large market capitalization have a direct impact on the Index rather than the share prices. To quality for inclusion into the NASDAQ Composite, a stock must be listed on the NASDAQ Stock Market Exchange, unless the company was listed dually on another U.S. market prior to 2004 and has continuously maintained such listing. At any time that a company failed to meet the criteria for inclusion, its stock was removed and may or may not be replaced by another company. The NASDAQ Composite was launched in January 5, 1971 with a base value of 100 and closed above the 1,000 mark for the first time on July 17,1995 after reaching the all-time low of 54 in October 1974, during 1973-1074 Stock Market Crash following the Yom Kippur War in Middle East and the 1973 Oil Crisis. On March 10, 2000 NASDAQ Composite peaked an all-time high of 5,048 and declined following the burst of the Dot.Com Bubble. Within a year, the NASDAQ Composite dropped to 1,114 and recovered gradually for more than half of its peak, reaching 2,861 in October 2007. Nonetheless, the financial crisis which started in Fall 2008 pushed the Index back to its low of 1,265 in March 2009. As of August 2009, the NASDAQ Composite made a healthy recovery and passed the 2,000 mark amid hope that the financial meltdown was coming to an end. Recently at the start of 2014, NASDAQ has passed again the 4,000 mark and shy 18% of its all-time high while Dow Jones and S&P 500 have both made all-time high. - 25 - NASDAQ Composite Index Other indexes Besides the three most followed market indices described above, a host of other indexes were created to track performances of varied industries and sectors of the economy.
Load more

Recommended publications
  • July 27, 2020 the Markets (As of Market Close July 24, 2020) Last Week Started Off on a High Note As Stocks Reached Levels Not Seen Since February
    West Chester Capital Advisors, Inc. Steven M. Krawick, AIF®, AAMS, CMFC President and Chief Executive Officer 216 Franklin Street 12th Floor Johnstown, PA 15901 814-553-5127 [email protected] www.ameriserv.com Market Week: July 27, 2020 The Markets (as of market close July 24, 2020) Last week started off on a high note as stocks reached levels not seen since February. The Nasdaq gained 2.5% last Monday, led by a surging Amazon and Zoom Technologies soared to a record high following the publication of positive COVID-19 vaccine results. Investors were encouraged by signs out of Washington that additional stimulus was on the way. The S&P 500 advanced 0.8% on the day while the Dow's gain was negligible. The Russell 2000 recovered from a poor Monday by gaining 1.3% last Tuesday to lead the benchmark indexes listed here. The Global Dow rose 0.9%, buoyed by a new round of economic stimulus from the European Union. The Dow climbed 0.6%, and the S&P 500 inched up 0.2%. The Nasdaq retreated from its record high on Monday, giving back 0.8% last Tuesday. Wednesday saw equities rise despite an increase in tensions between the United States and China. Pfizer vaulted 5.1% on positive COVID-19 vaccine developments. The Dow and the S&P 500 each gained nearly 0.6%, with the latter reaching a five-month high. The Nasdaq and the Russell 2000 each gained 0.2% on the day. Stocks ended a 4-day run last Thursday, falling to their lowest levels in a week.
    [Show full text]
  • Linking Opportunity with Responsibility Sustainability Report 2004 P&G 2004 Sustainability Report 1
    Linking Opportunity with Responsibility Sustainability Report 2004 P&G 2004 Sustainability Report 1 Sustainable development is a very simple idea. It is about ensuring a better quality of life for everyone, now and for generations to come.1 P&G’s Statement of Purpose We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. Table of Contents CEO Statement 2 Vision 3 P&G Profile 4 Policies, Organization, and Management Systems 16 Performance 37 Environmental 39 Economic 49 Social 52 Sustainability In Action 53 Water 55 Health and Hygiene 56 Index 58 Contact Information 62 Addendum 63 This report was prepared using the Global Reporting Initiative’s On the Cover (GRI) July 2002 Sustainability Reporting Guidelines. The mission A mother and child in Haiti drink clean water because of P&G’s Safe Drinking of the GRI is to promote international harmonization in the Water Program. Please see the reporting of relevant and credible corporate economic, Sustainability in Action section for environmental, and social performance information to enhance more details. responsible decision-making. The GRI pursues this mission through a multistakeholder process of open dialogue and collaboration in the design and implementation of widely applicable sustainability reporting guidelines. The GRI has not verified the contents of this report, nor does it take a position on the reliability of information reported herein.
    [Show full text]
  • Market Week: July 20, 2020 the Markets (As of Market Close July 17, 2020) Stocks Surged Early Last Monday Only to Fall Back by the End of the Day
    Bob Grillo, CFP®, AIF® 115 East Putnam Ave. 3rd Floor Greenwich, CT 06830 203-622-4990 [email protected] www.tempusadvisors.com Market Week: July 20, 2020 The Markets (as of market close July 17, 2020) Stocks surged early last Monday only to fall back by the end of the day. Earlier in the day, the S&P 500 reached its highest level since the COVID-19 pandemic sent equities reeling. The Nasdaq hit another record high in early trading. Unfortunately, stocks couldn't hold their values as states hard-hit by growing numbers of reported virus cases began to rein in reopening measures. European stocks climbed last Monday as did Treasury bond yields. Crude oil prices dipped ahead of an OPEC meeting that could result in plans to ease production cuts. Equities rebounded last Tuesday as the Dow rose 2.1%, the S&P 500 climbed 1.3%, the Nasdaq advanced 0.9%, and the Russell 2000 gained 1.76%. Treasury yields slid 3.91% while crude oil prices jumped 0.85%. Market sectors advancing last Tuesday included energy, materials, industrials, and consumer staples. Optimism about progress on a COVID-19 vaccine spurred investors last Wednesday. By the end of the day, the Russell 2000 jumped 3.5%, followed by the Global Dow, which advanced 1.3%. The S&P 500 gained 0.9%, the Dow increased 0.85%, and the Nasdaq rose 0.6%. Crude oil and Treasury yields grew while the dollar fell. Banks led financial stocks higher, and energy stocks also climbed. A drop in technology shares pulled stocks lower last Thursday, ending a two-day rally.
    [Show full text]
  • October 22, 2018 8:30 – 9:45 A.M
    Sunday | October 21, 2018 1:00 p.m. – 5:00 p.m. Workshop 1: Win-Win Conversations: Transforming Conflict Into Collaboration Margie Bastolla, CIA, CRMA Principal Margie Bastolla Facilitations, LLC It’s a fact. Conflict is a part of life. Your attitude toward conflict will determine your success during difficult conversations at work and whether you achieve favorable results. Win-win conversations require that we learn why conversations fail, as well as proven methods to ensure that even our most difficult conversations have a high chance of success. In this session, participants will: • Identify key skills that underpin successful conversations and negotiations. • Discuss eight conflict triggers and five methods for managing them. • Learn how collaboration can be particularly effective when the stakes are high. • Discuss activities that lead to ongoing collaboration and trust throughout the audit. Margie Bastolla is a professional trainer and speaker who provides customized, onsite training for internal auditors on both technical and soft skill topics. She has worked in over 40 countries, conducting hundreds of seminars, workshops, and conference sessions for corporations, government entities, U.N. agencies, and IIA chapters and institutes. Bastolla draws on 30 years of leadership experience in internal auditing, international relations, association management, and public accounting. Previously, she was an executive with The IIA’s global headquarters and an auditor with Worthen Banking Corporation and Deloitte. Monday | October 22, 2018 8:30 – 9:45 a.m. General Session 1: Security in a Connected World Marc Goodman Global Security Strategist Author of Future Crimes Chair for Policy, Law, and Ethics, Silicon Valley’s Singularity University A huge proponent of technology, Marc Goodman knows that the positive aspects of the Internet are manifest.
    [Show full text]
  • Cimdata Cpdm Late-Breaking News
    PLM Industry Summary Sara Vos, Editor Vol. 20 No. 41 - Friday, October 12, 2018 Contents CIMdata News _____________________________________________________________________ 2 Developing Safe Autonomous Vehicles for Innovative Transportation Experiences (CIMdata Commentary) 2 Dr. Keith Meintjes, a CIMdata Executive Consultant, will Host Sessions on Vehicle Exteriors at the Lightweighting World Expo 2018 __________________________________________________________7 Generating the Next Step: Autodesk Accelerate 2018 (CIMdata Commentary) _______________________8 Key Sponsors of PLM Road Map™ EMEA 2018 and PDT Europe 2018 Announced _________________11 Rethinking the Enterprise: Inforum 2018 (CIMdata Commentary) ________________________________12 Acquisitions ______________________________________________________________________ 15 Atos digital leadership strengthened by the completion of the acquisition of the US-based Syntel________15 Capgemini reinforces its digital services portfolio in Italy with the acquisition of Doing _______________16 Gerber Acquires MCT Digital Integrating Two Histories of Innovation in Automated Cutting & Finishing 17 Gerber Technology Acquires Avametric, Deepens Investment to Provide End-to-End 3D Solution For Fashion Industry _______________________________________________________________________17 Company News ____________________________________________________________________ 18 ANSYS and Granta Design Collaborate To Empower Additive Manufacturing ______________________18 Cadence Recognized With Four 2018 TSMC
    [Show full text]
  • SD Update – Newsletter Sustainable Development
    SD Update Newsletter Sustainable Development 2/2013 November In this issue BASF receives European Water Stewardship certificate Page 2 North of France: First passive house in social housing Page 3 More sustainability in the chemical supply chain Page 3 BASF again included in two renowned indices Page 4 BASF Corporation recognized for Diversity Management Page 4 Praise for sustainability initiative “Chemie³” Page 5 European Business Forum – Sustainability in Europe Page 5 BASF signs WASH pledge Page 6 BASF launches Nutrition Compact Page 6 German Global Compact Network: Reelection of steering committee Page 6 2 Newsletter Sustainable Development 2/2013 About this issue Sustainability is a journey that France to diversity management in ed links to additional sustainability BASF shapes with manifold exam- the US, from sustainability indices topics and events – to keep you in- ples from different areas. This va- and certification to the topic of wa- formed with just a few clicks. riety is reflected by the topics we ter. Moreover, the newsletter gives selected for this second 2013 is- insights into the initiatives and net- We hope you enjoy reading the sue of “SD Update – Newslet- works BASF supports in order to new issue. ter Sustainable Development”. drive Sustainable Development. They range from social housing in On the last page we have collect- The editorial team BASF receives European Water Stewardship certificate BASF is the first chemical com- certificate, auditors of third party tion in downstream water bodies. pany to achieve gold-level certifi- certification body TÜV Nord Integ- The European standard was devel- cation according to the European ra assessed the entire water man- oped by governments, businesses Water Stewardship (EWS) stan- agement performance of BASF’s and NGOs under the leadership of dard for its production site in Tarra- production site, from extraction of the independent organization Eu- gona, Spain.
    [Show full text]
  • IBM • Hungry for Change Executives
    TELECOM INDUSTRY EDITION GLOBAL CEO STUDY 2 the enterprise of the future INTRODUCTION We conducted 1,130 interviews with chief executives, general man- SURVEY SAMPLE agers, business leaders and public-sector heads in the course of Our telecom sample completing the research for our third biennial Global CEO Study, includes CEOs from fixed-line telecom which aims to identify the key characteristics of the Enterprise of the providers, mobile telecom Future.1 Here we focus on the responses of the 47 CEOs who run providers and integrated operators. Thirty-seven telecom companies (see Survey sample sidebar). percent are based in the Americas; 43 percent in Europe, the Middle East Our findings show that the Enterprise of the Future has five key traits. and Africa; and 20 percent It is: in Asia. Almost all of these leaders were interviewed face-to-face by IBM • Hungry for change executives. • Innovative beyond customer imagination • Globally integrated • Disruptive by nature • Genuine, not just generous. HUNGRY INNOVatiVE GLOBALLY DISRUPTIVE GENUINE, FOR BEYOND INTEGRATED BY NOT JUST CHANGE CUSTOMER NATURE GENEROUS IMAGINATION HUNGRY 3 FOR CHANGE Telecom CEOs are acutely aware of the need for change, but unsure how to make change work. How can they replace falling voice telephony revenues and fend off new rivals? Telecom CEOs anticipate a period of even greater change than their peers in most other industries. Eighty-seven percent expect signifi- cant changes in the next three years, compared with 83 percent of the total survey population. However, they are no better at managing change than CEOs in other sectors.
    [Show full text]
  • The Look of Love Why Cycling Paris’S Musée Du Luxembourg Focuses on Beats Football Fragonard’S Idealized, Romantic World ARTS | A9 the BACK PAGE | A12
    For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com Jason Gay on The Look of Love Why Cycling Paris’s Musée du Luxembourg focuses on Beats Football Fragonard’s idealized, romantic world ARTS | A9 THE BACK PAGE | A12 | TUESDAY, SEPTEMBER 29, 2015 ~ VOL. XL NO. 21 WSJ.com ASIA EDITION DJIA 16089.22 g 1.38% S&P 500 1896.75 g 1.79% NIKKEI 17645.11 g 1.32% STOXX 600 341.57 g 2.21% OIL 44.65 g 2.30% GOLD 1133.20 g 1.12% EURO 1.1232 À 0.29% YEN ¥119.81 g 0.65% What’s In Hong Kong, Umbrellas Return to Mark an Anniversary Alcoa News Unveils Plan Business&Finance To Split luminum maker Al- Acoa, hurt by depressed prices, said it plans to split BY JOHN. W. MILLER into two publicly traded AND CHELSEY DULANEY companies next year. A1 Alcoa Inc. said Monday that Glencore shares hit a it plans to split into two pub- new low on concerns that licly traded companies next persistently low commodity year, a move that would iso- prices will cripple its debt- late the aluminum maker’s laden balance sheet. A1 more profitable downstream Comcast plans to spend parts units from its raw-alumi- $1.5 billion for control of a num operations. theme park in Japan. B1 The split is a dramatic cor- porate consequence of the Shell said it would end commodity bust driven by a its drilling program in the slowdown in Chinese eco- Alaskan Arctic after a dis- nomic growth.
    [Show full text]
  • S&P Dow Jones Indices Announcement For
    INDEX ANNOUNCEMENT S&P Dow Jones Indices Announcement for Additional Removals due to Sanctions NEW YORK, JANUARY 7, 2021: S&P Dow Jones Indices (“S&P DJI”) will remove the following securities from indices effective prior to the open on Tuesday, January 12, 2021. Equity • China Mobile Ltd. (Ticker: 0941.HK) • China Telecom Corporation Ltd. - H Shares (Ticker: 0728.HK) • China Unicom (Hong Kong) Ltd. (Ticker: 0762.HK) Fixed Income • China Telecom Corp Ltd (ISIN: CND100020NC4) • China Telecom Corp Ltd (ISIN: CND1000248G3) • China Telecom Corp Ltd (ISIN: CND10003ND87) • China Telecom Corp Ltd (ISIN: CND10003QNY2) • China United Network Communications Co Ltd (ISIN: CND10002JBL1) S&P DJI’s announcement to move forward with removing the above-referenced securities from its indices is in accordance with the guidelines described in the Sanctions section of S&P DJI Equity Indices Policies & Practices Methodology and S&P DJI Fixed Income Indices Policies & Practices Methodology. On January 6, 2021, the U.S. Department of the Treasury issued FAQ No. 864 with respect to the November 12, 2020 Executive Order No. 13959 regarding a prohibition on U.S. transactions in certain Chinese securities. The FAQ identifies the above-referenced companies as companies whose name exactly or closely matches the name of an entity identified in the Annex to E.O. 13959. The prohibition in section 1(a)(i) of E.O. 13959 takes effect at 9:30 a.m. eastern time on January 11, 2021. S&P DJI continues to review the implications of the guidance provided by the US Department of the Treasury - Office of Foreign Assets Control regarding entities impacted by the November 12, 2020 Executive Order prohibiting U.S.
    [Show full text]
  • Market Week: July 20, 2020 the Markets (As of Market Close July 17, 2020) Stocks Surged Early Last Monday Only to Fall Back by the End of the Day
    Cassandra Financial Group John Cassandra, CRPS®, CPFA®, AAMS®, AIF® Branch Manager 8198 Jog Road Suite 200 Boynton Beach, FL 33472 561-369-8400 x106 [email protected] http://cassandrafinancial.com/ Market Week: July 20, 2020 The Markets (as of market close July 17, 2020) Stocks surged early last Monday only to fall back by the end of the day. Earlier in the day, the S&P 500 reached its highest level since the COVID-19 pandemic sent equities reeling. The Nasdaq hit another record high in early trading. Unfortunately, stocks couldn't hold their values as states hard-hit by growing numbers of reported virus cases began to rein in reopening measures. European stocks climbed last Monday as did Treasury bond yields. Crude oil prices dipped ahead of an OPEC meeting that could result in plans to ease production cuts. Equities rebounded last Tuesday as the Dow rose 2.1%, the S&P 500 climbed 1.3%, the Nasdaq advanced 0.9%, and the Russell 2000 gained 1.76%. Treasury yields slid 3.91% while crude oil prices jumped 0.85%. Market sectors advancing last Tuesday included energy, materials, industrials, and consumer staples. Optimism about progress on a COVID-19 vaccine spurred investors last Wednesday. By the end of the day, the Russell 2000 jumped 3.5%, followed by the Global Dow, which advanced 1.3%. The S&P 500 gained 0.9%, the Dow increased 0.85%, and the Nasdaq rose 0.6%. Crude oil and Treasury yields grew while the dollar fell. Banks led financial stocks higher, and energy stocks also climbed.
    [Show full text]
  • Tweets at the Federal Reserve and #FOMC
    140 Broadway, 21st Floor, New York, NY 10005 Tel: 212-380-2280 Fax: 212-380-2290 www.fpcmllc.com Tweets at the Federal Reserve and #FOMC @federalreserve Don’t be afraid to #raiserates at #FOMC meeting. Don’t be afraid to sell some of your QE portfolio! “But I still haven’t found what I’m looking for” -U2 he Minutes from recent Federal Open Market Committee (FOMC) meetings are filled with economic excuses. Whether it’s global equity volatility, the falling T commodity complex, one month’s unexpected weak nonfarm payroll report (i.e., May 2016 report) or Brexit, the FOMC has done a masterful job of finding any and all excuses to not raise interest rates. According to the often-followed Taylor Rule, at this level of economic activity, the Federal Funds rate should be at 3.45% by now. Yet, we are stuck at 0.5%. As in the U2 song, the FOMC still hasn’t found the data they are looking for. While nominally Fed members have been stating that they are economic “data-dependent” in their approach to interest rate policy, empirically, they have been primarily financial markets- and geopolitical-dependent. Economic data has taken a back seat of late in terms of FOMC concerns, overshadowed by well-covered global events. As global equity markets sell off, the succeeding FOMC minutes lean towards dovishness; and as equity markets rebound, the hawkish verbiage reappears. From a behavioral perspective, it is understandable for Committee members to be reactive to financial markets for several reasons. First, global markets act as an economic scorecard.
    [Show full text]
  • Investor Presentation
    Certain statements in this presentation concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation.
    [Show full text]