Easy Money In Us But Not For Long:-

Discussion in 'Economics' started by bapunagar, Sep 29, 2006.

  1. Dow Jones touched the all time high, US stock rallied for the fourth day, as the falling oil prices and slowing economic growth signaled the Federal Reserve for not rising interest rates this year. The Federal Reserve’s decision indicates that the economic growth is slowing, especially the housing economy. The aim of Federal Reserve is now to increase mortgage loan demand by ceasing the constant increasing of rates and fees and also added that “we can’t continue to raise rates without expecting the housing economy to suffer”. High rates results in high cost and slow sales and low level of economic activity in housing.
    General Motors has been considered as the best performing stock in the industrial average this year next comes the Intel corp. after City Group investment research boosted its earning estimation as world’s largest semiconductor maker.
    Investor’s are finding it interesting that the growing trend in the stock market may benefit them to a large extent but also on the other hand the investors are also getting worried about this growing trend may not continue for long, as the economic trend is positive and the market may change.
  2. Who is constantly increasing fees? Which fees are they constantly increasing? Does the Federal Reserve control these people?
  3. wrong - dj touched the a.t.-closing-high...
  4. interesting breakdown of the dow since 2000 record close.
    Dow Components

    Eastman Kodak -62.22% [No longer in Dow]
    General Motors -60.74%
    Intel Corp -60.18%
    Microsoft Corp -51.27%
    Home Depot Inc -41.21%
    Merck & Co -39.47%
    Intl Paper Co -38.47% [No longer in Dow]
    Du Pont -36.06%
    Honeywell Intl -31.31%
    IBM -31.19%
    Alcoa Inc -30.83%
    General Electric -29.46%
    Coca-Cola Co -26.62%
    Wal-Mart Stores -23.24%
    AT&T Inc -21.05%
    Hewlett-Packard -18.83%
    Disney (Walt) Co -7.43%
    McDonalds Corp -6.35%
    JPMorgan Chase -4.43%
    Dow Jones Indus. Avg -0.12%
    Procter & Gamble 7.72%
    American Express 19.73%
    Citigroup Inc 24.22%
    Johnson&Johnson 38.18%
    3M Co 50.67%
    Exxon Mobil Corp 59.09%
    Boeing Co 80.93%
    United Tech Corp 98.52%
    Caterpillar Inc 153.77%
    Altria Group Inc 220.83%

    What's amazing is that 20 of the 30 Dow Components are off their highs, and that so many of the them are WAY OFF their 2006 highs. Of the 20 Dow components that are below their 2000 peaks, 14 of those 20 off by more than 25%.

    That is the nature of a price weighted index
  5. Didn't the DJIA components change twice since 2000? When were MSFT and INTC added?
  6. MSFT, INTC, HD & WMT were included in ~1999. EK, S, BS & MOB were excluded. The index is taking on more of a "technology feel" instead of industrial.