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The
Fed and the Market
Brian
Trumbore
President/Editor, StocksandNews.com
I've been meaning to take a look at
the Federal Reserve and the impact the now 17 consecutive
interest rate increases have had on the equity market
but, alas, upon review the verdict is basically zero;
until Ben Bernanke's May pronouncement, that is.
Otherwise,
Wall Street hasn't been spooked by the Fed, for the
most part, despite all the inter-meeting chatter,
primarily because under former Chairman Alan Greenspan
the Fed did a great job of telegraphing its moves
well ahead of time; thus there were few actual surprises.
[Greenspan himself, however, was clearly surprised
at the tepid reaction on the long end of the yield
curve, which helped allow the real estate bubble to
expand further?at least some of us feel that way.]
Anyway,
time is limited here so if I start on a project I
have to run with the result, even if it isn't earth-shattering.
Following
are the dates of the Fed rate moves, all a quarter-point,
the closing price of the S&P 500 for both the day
before and the day of the Fed's action, as well as
the S&P's closing values one and two weeks afterwards.
For
example, the Fed increased the funds rate from 1 to
1.25 percent on June 30, 2004, the S&P 500 closed
the day before at 1136 and 1140 the day of the move,
was 1118 one week later and 1111 two weeks later.
6/30/04?.1.00-1.25?(1136)
1140?1118 / 1111
8/10/04?.1.25-1.50?(1065)
1079?1081 / 1096
9/21/04?.1.50-1.75?(1122)
1129?1110 / 1134
11/10/04...1.75-2.00?(1164)
1162?1181 / 1181
12/14/04?2.00-2.25?(1198)
1203?1205 / 1213
2/2/05??2.25-2.50?(1189)
1193?1191 / 1210
3/22/05?.2.50-2.75?(1183)
1171?1165 / 1181
5/3/05?...2.75-3.00?(1162)
1161?1166 / 1173
6/30/05?.3.00-3.25?(1199)
1191?1197 / 1226
8/9/05?...3.25-3.50?(1223)
1231?1219 / 1217
9/20/05?.3.50-3.75?(1231)
1221?1215 / 1214
11/1/05?.3.75-4.00?(1207)
1202?1218 / 1229
12/13/05...4.00-4.25?(1260)
1267?1259 / 1256
1/31/06?.4.25-4.50?(1285)
1280?1254 / 1275*
3/28/06?.4.50-4.75?(1301)
1293?1305 / 1286**
5/10/06?.4.75-5.00?(1325)
1322?1270 / 1258
6/29/06?.5.00-5.25?(1246)
1272?1274??
*Alan
Greenspan's last meeting as chairman.
**Ben
Bernanke's first meeting as chairman.
Source:
Federalreserve.gov and my own collection of data.
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The
State of the City
Each
year "Crain's New York Business" releases a slew of
"market facts" on the state of New York City's economy.
Since New York is still the financial capital of the
world (at least to us Americans), it's obviously a
pretty good barometer.
Miscellaneous
Statistics
--New
York City's population:
White?34.4%
Hispanic / Latino?28.6
Black?24.3
Asian?11.3
--Estimated
Gross City Product?$454 billion
--Employment:
Securities
Industry?2000 (peak)?195,400; 2005?170,800
[Employment
bottomed in 2003 at about 160,000.]
Leisure
& Travel Industry?2000?256,700; 2005?276,800
--Visitor
spending in NYC
2000?$17.0
billion
2002?$14.1 billion [post-9/11 low]
2005?$22.3 billion [est.]
--Market
share for overseas travelers' top U.S. destinations
in 2004 (latest available data):
New
York?25.4%
Los Angeles?11.2
Miami?10.8
Orlando?9.6
Honolulu/Oahu?9.2
San Francisco?9.2
Las Vegas?7.7
Washington, D.C.?5.2
Chicago?4.6
Boston?4.1
--Leading
Trade Partners thru New York / New Jersey ports:
Imports
(2005)
1.
China 2. Italy 3. Germany 4. India 5. Brazil
Exports
1.
China 2. India 3. United Kingdom 4. Japan 5. Germany
--In
1998, imports from China thru New York / New Jersey
ports approximated 1,000,000 metric tons. In 2005,
it was close to 4,000,000. Over the same period, exports
to China have climbed from 250,000 metric tons to
1,900,000.
--Manhattan
Co-op Prices (Upper East Side)
Two-bedroom
2001?$834,000
2005?$1,345,000
--Lastly,
I just found the following interesting.
Leading
causes of death for men in NYC:
Heart
disease?36.1%
Cancer?24.1
Influenza / pneumonia?4.9
HIV?3.4
Diabetes?2.9
All others?28.6
Leading
causes of death for women:
Heart
disease?42.4%
Cancer?23.3
Influenza / pneumonia?5.5
Cerebrovascular?3.4
Chronic lower respiratory disorders?3.1
All others?22.3
---
Wall
Street History returns next week.
Brian
Trumbore
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