The stock market sure liked what the Federal Reserve had to say yesterday - or rather what the Fed didn't say. With unemployment continuing to fall and GDP growth remaining strong, many economic pundits thought this might be the moment for the Fed to announce it was finally raising interest rates. Instead, it said following its March meeting that an April rate hike "remains unlikely."
In large part, this is because the Fed's view of the economy is not as rosy as you might think. Its current forecast, released yesterday, projects GDP growth to be 2.3 to 2.7 percent for all of 2015, down from its December projection of 2.6 to 3.0 percent. The forecast for 2016 is roughly the same.
Still, the market was more impressed by the unchanged interest rates than it was by the changed growth prediction. The S&P 500 was down by 8 points before the Fed's announcement, but promptly turned that around to a gain of 25 points.
Thursday, March 19, 2015
Wednesday, March 18, 2015
American Airlines Takes Off
There are some changes happening in the S&P 500 at the end of this week, as Allergan - best known as the manufacturer of Botox - is being acquired by the Irish pharmaceutical giant Actavis. Allergan will be replaced in the index by the American Airlines Group.
Until Friday, the only airlines in the S&P will be Delta and Southwest. United Continental, despite representing the merger of two of the most prominent airlines in the nation, is not in the index. Neither was American, despite the fact that it was the result of the December 2013 merger of American with USAir.
The addition is a sign of how American has come roaring back after flirting with bankruptcy a few short years ago. In November 2011, the airline's stock price dropped down all the way to about 4. By the time of the merger with USAir, two years later, it had bounced up to about 20. Now it's over 50 - an increase of more than 1000 percent.
Until Friday, the only airlines in the S&P will be Delta and Southwest. United Continental, despite representing the merger of two of the most prominent airlines in the nation, is not in the index. Neither was American, despite the fact that it was the result of the December 2013 merger of American with USAir.
The addition is a sign of how American has come roaring back after flirting with bankruptcy a few short years ago. In November 2011, the airline's stock price dropped down all the way to about 4. By the time of the merger with USAir, two years later, it had bounced up to about 20. Now it's over 50 - an increase of more than 1000 percent.
Tuesday, March 17, 2015
It's Official: Newark Airport Is a Headache
If you've traveled at all from here in New Jersey, you've probably flown in and out of Newark Liberty Airport. And if you thought that airport was a pain in the you-know-what, you're right. According to a new study from the website FiveThirtyEight.com, among the 30 largest airports in the U.S., Newark has the worst time lags.
Newark adds an average of an extra 25 minutes to both departure and arrival target times, making it the worst in the industry. LaGuardia is just as bad, adding an average of 27 minutes to departure times and 23 minutes to arrival times. In third place? You guessed it: JFK adds 24 minutes to departures and 19 minutes to arrivals.
You're a little better off going down to Philadelphia, which adds 18 minutes to departures and 15 minutes to arrivals. The most efficient major airport, according to this study, is in Honolulu, where they're actually ahead of schedule on both ends, with departures coming in 7 minutes ahead of time and arrivals at 6 minutes.
Newark adds an average of an extra 25 minutes to both departure and arrival target times, making it the worst in the industry. LaGuardia is just as bad, adding an average of 27 minutes to departure times and 23 minutes to arrival times. In third place? You guessed it: JFK adds 24 minutes to departures and 19 minutes to arrivals.
You're a little better off going down to Philadelphia, which adds 18 minutes to departures and 15 minutes to arrivals. The most efficient major airport, according to this study, is in Honolulu, where they're actually ahead of schedule on both ends, with departures coming in 7 minutes ahead of time and arrivals at 6 minutes.
Monday, March 16, 2015
What's Hurting the Market?
There's no way to get around it: The markets had a miserable week last week. With their third straight weeks posting declines, both the S&P 500 and the Dow Jones Industrial Average are now down overall for the year. What's happening?
One problem continues to be the dropping price of crude oil. Even though gasoline prices have started to turn upward, the price of crude fell by 4 percent on Friday amid warnings that the U.S. still has huge stockpiles of oil built up. That's been hammering energy stocks.
The rising dollar/falling euro also continues to bedevil American companies that sell their goods abroad. Finally, wholesale producer prices have fallen for four straight months, reducing the amount companies can get for their goods and bringing about the specter of deflation. It's an odd situation where all these things that might be good for American consumers have had detrimental effects on stocks.
One problem continues to be the dropping price of crude oil. Even though gasoline prices have started to turn upward, the price of crude fell by 4 percent on Friday amid warnings that the U.S. still has huge stockpiles of oil built up. That's been hammering energy stocks.
The rising dollar/falling euro also continues to bedevil American companies that sell their goods abroad. Finally, wholesale producer prices have fallen for four straight months, reducing the amount companies can get for their goods and bringing about the specter of deflation. It's an odd situation where all these things that might be good for American consumers have had detrimental effects on stocks.
Friday, March 13, 2015
Gas Turns Back
Well, it was fun while it lasted. But the U.S. Energy Information Administration announced yesterday that gasoline prices turned upward in February, reversing a decline that had continued unabated since last summer. The national average for a gallon of regular gasoline was $2.22 last month, up from $2.12 in January. Here in New Jersey, the average price of a gallon of gas is at $2.25.
With prices going up, Americans spent more at gas stations in February for the first time since May 2014. Purchases at gas stations rose by 1.5 percent last month, the largest monthly gain since December 2013.
Still, we're in much better shape than we were not so long ago. The Commerce Department also reported that gas station sales in February were still down by 23 percent from a year earlier.
With prices going up, Americans spent more at gas stations in February for the first time since May 2014. Purchases at gas stations rose by 1.5 percent last month, the largest monthly gain since December 2013.
Still, we're in much better shape than we were not so long ago. The Commerce Department also reported that gas station sales in February were still down by 23 percent from a year earlier.
Thursday, March 12, 2015
America Leads the Real Estate Market
America's real estate market is not quite back to its pre-recession peak yet, but for the first time since 2009, the U.S. was the top destination for capital going into real estate markets last year. Total investment in real estate in America was up 12 percent in 2014, reaching $410 billion and pushing us ahead of China for the first time in five years, according to a new report from Cushman and Wakefield.
Investment in the entire global real estate market fell by 6.4 percent last year, driven in part by dropping land values in China. China is still the second most valuable real estate market in the world, though, followed by the U.K., Germany, and Japan.
New York City, unsurprisingly, was the top city worldwide for real estate investment, with more than $66 billion invested there. It's followed among global cities by London, Tokyo, L.A., and San Francisco. Here in the U.S., New York is followed by L.A., San Francisco, Washington, D.C., Chicago, and Boston, in that order.
Investment in the entire global real estate market fell by 6.4 percent last year, driven in part by dropping land values in China. China is still the second most valuable real estate market in the world, though, followed by the U.K., Germany, and Japan.
New York City, unsurprisingly, was the top city worldwide for real estate investment, with more than $66 billion invested there. It's followed among global cities by London, Tokyo, L.A., and San Francisco. Here in the U.S., New York is followed by L.A., San Francisco, Washington, D.C., Chicago, and Boston, in that order.
Wednesday, March 11, 2015
Millionaires Everywhere!
For the first time in American history, there are more than 10 million millionaires in our country. The Spectrem Market Insights 2015 report found that the number of households with a net worth of $1 million or more grew by almost 500,000 households in 2014, reaching an all-time high of 10.1 million.
The percentage of millionaires among the population has reached 8.3 percent, which is even higher than it was before the recession. In the year 2007, when the recession officially started, the percentage of millionaire households was 8.2 percent, before falling to 5.9 percent in 2008.
The number of households at higher wealth levels has also been growing. Households with a net worth of between $1 million and $5 million increased by 400,000, to 8.79 million. Those between $5 million and $25 million grew by 60,000, to 1.168 million, and those with more than $25 million grew by 10,000, to reach 142,000.
The percentage of millionaires among the population has reached 8.3 percent, which is even higher than it was before the recession. In the year 2007, when the recession officially started, the percentage of millionaire households was 8.2 percent, before falling to 5.9 percent in 2008.
The number of households at higher wealth levels has also been growing. Households with a net worth of between $1 million and $5 million increased by 400,000, to 8.79 million. Those between $5 million and $25 million grew by 60,000, to 1.168 million, and those with more than $25 million grew by 10,000, to reach 142,000.
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