Word: nasdaq
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...dreaded R word. But our current economic plight isn't (at least yet) as simple as the two quarters of negative economic growth that define a recession. Instead, the indicators are like a glitchy traffic light, flashing red and green and yellow at the same time. The NASDAQ has plunged a portfolio-punishing 50% from its highs in March. But the Labor Department announced last week that new claims for state unemployment insurance were down sharply last month. The Conference Board's Consumer Confidence Index fell for the third consecutive month, to its lowest level in two years...
There are clearly some old-style brakes at work, including rising energy prices, interest rates and debt burdens, all of which take money out of consumers' pockets. But we're also seeing several new wrinkles, like the way the beaten-up NASDAQ appears to be pulling the economy down rather than the other way around. However shallow or deep this downturn proves to be, it is unfolding according to a fresh set of New Economy rules. Among them...
...momentum. High volatility on the upside is fun; it's nice to see that a stock you bought on Tuesday is worth 30% more on Thursday. But on the downside, it can turn a minor downtick into a major bloodbath. And that's one reason why for the NASDAQ the year 2000 was the worst in its 29-year history...
That's because an unprecedented 49% of American households today own stocks, either directly or through mutual funds and 401(k) plans, compared with just 4% in 1952. When the market rises, Americans feel wealthy. In 1999, when the Dow gained 25% and the NASDAQ soared 85%, household assets swelled by $5.5 trillion. This "wealth effect" translates into increased spending. The rule of thumb is that for every additional dollar in their portfolios, Americans spend another 3[cents] to 5[cents]. That discretionary income is critical: consumer spending constitutes almost two-thirds of the nation's economic activity...
...some cases, the fixes will take time. The NASDAQ just turned in the worst year of its 29-year existence, falling 39%. The Dow and the S&P 500 were also losers last year. The more than $2.5 trillion of vanished stock-market wealth since March won't be easy to get back. The NASDAQ, for example, would have to rise more than 15% a year for five years to return to its high. Meanwhile, consumer debt (excluding mortgages) has doubled over the past decade and averages nearly $15,000 per household. It will take years for borrowers...