September 29, 2006

Biz-Econ News Roundup (092906)

Filed under: Business Moves, Economy, Taxes & Government — TBlumer @ 8:00 am

There’s been something for both optimists and pessimists to feed on during the past two days.

On the optimistic side:

  • Cheaper winter heating bills appear to be on the way — That goes for natural gas, fuel oil, and propane.
  • Sales of new single-family homes went UP 4.1% in August, a total reversal of expectations that they would drop 3.0%. That reversed three months of declines.

Not so good:

  • Mortgage applications dipped last week.
  • Ford’s massive job cuts spread to its credit operations. I’m surprised Ford hasn’t just tried to sell Ford Motor Credit. Maybe this move will dress it up for a sale.
  • Despite the near-record level of the Dow, it’s more than fair, as I mentioned the last time the Dow reached near-record territory back in May, to point out that the S&P 500 is over 12% below its alltime high of 1527 set in 2000, and the NASDAQ is still a whopping 55% below its alltime high of over 5000. I wouldn’t blame anyone for failing to be impressed until the S&P 500 achieves full recovery.

2 Comments

  1. Regarding your “Not so Good” section, the whole thing about the DOW reaching an all time high is rather misleading. For one thing there have been several changes in which companies make up the DOW. If you look at the companies in the DOW in January 2000 it wouldn’t be anywhere near its current level. The other thing is the DOW is obviously not adjusted for inflation. Inflation has been fairly low the last few years but not non-existent. Personally, I think CNBC and others have over obsessed on the DOW which is a tiny slice of the overall market.

    Comment by LargeBill — September 29, 2006 @ 9:20 am

  2. #1, Your points reinforce what I said about why we shouldn’t be impressed that the Dow is at an alltime high. And of course you are right that if an index doesn’t beat inflation over the long haul, we’re better off keeping our money in safe stuff, as has essentially been the case on the whole in hindsight for the last 5-6 years.

    Comment by TBlumer — September 29, 2006 @ 6:54 pm

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