DJIA Archives - Colorado-based Business and Economic Research

The Return of the Dow Jones Industrial Average – 26.5%

January 1, 2014January 1, 2014 horvath Leave a comment

What a year it was – at least for the equities markets!

The DJIA surpassed the peak for 2007 and closed the year 2013 at 16,577.

The 2013 closing total was 26.5% above the close in 2012. It follows growth rates of:

5.9% in 2012
5.5% in 2011
11.0% in 2010.

The great crash of 2008 seems so far away.

Looking back…the DJIA peaked at 14,163 on October 9, 2007. Between then and December 31, 2013, the market rose by 2,274 points. This is an annualized rate of change of only 2.5%, slightly better than the rate of inflation.

Suddenly 26.5% doesn’t sound so good, but thank goodness it happened!

Is Colorado Better Off Now Than We Were When the DJIA Reached Its Peak in 2007?

March 6, 2013March 6, 2013 horvath Leave a comment

On March 5, 2013 The Dow Jones Industrial Average moved into uncharted territory when it closed at 14,253.77. This surpassed the previous peak, last seen on October 9, 2007. To quote the legendary musician Sam Cooke, “It’s been a long time coming”, 1,974 days to be exact.

The run that ended on October 9, 2007 began on October 9, 2002 when the DJIA bottomed out at 7,286.27. In those five years the bulls drove the DJIA up by 6,878.26 points. Quite a rally!

Then the DJIA cratered, dropping from 14,253.77 to 6,547.05 on March 9, 2009. It lost 7,617.48 points. That brings back painful memories. It has taken almost four years to regain what the market lost in less than one year.

As of March 9 (assuming there is no collapse between now and then) the current bull market will have gained over 7,600 points, in 1,096 days. Impressive! But, how much longer will it last?

The Colorado economic landscape is much different than it was in October 2007.

Wage and Salary Employment (Seasonally Adjusted)

October 2007 2,345,500
Most recent December 2012 2,316,600
Colorado has about 28,900 fewer workers today. (That number will be slightly less when the BLS releases their annual revisions later this month.

Unemployment Rate(Seasonally Adjusted)
October 2007 4.0% and rising
Most recent December 2012 7.5% and slowly declining

State Sales Tax Revenue
FYE June 2008 $2,126.6 Million
FYE June 2013 $2,226.6 Million
The annual projections are only $100 million higher.

Individual Income Tax Revenue
FYE June 2008 $4,973.7 million
FYE June 2013 $5,216.9 million
Annual projections are only $243.2 million higher.

General Fund
FYE June 2008 $7,742.9 million
FYE June 2013 $8,025.9 million
Annual projections are only $283.0 million higher.

Credability Consumer Distress Index
Q3 2009 79
Most recent Q4 2012 75
The index is 4 points lower meaning consumers are still at risk.

Gasoline Prices All Grades
Week ending October 11, 2007 $2.81 per gallon
Week ending March 4, 2013 $3.62 per gallon
Gasoline prices are $.81 cents higher per gallon.

Case Shiller
Q3 2007 136.1 and declining
Q3 2012 131.6 and rising
The housing market is improving.

It is truly a different world in Colorado. Clearly, the state economy has not experienced the same level of growth as corporate profits and the stock market.

Dow Jones Posts Solid Gains in 2012

January 17, 2013January 17, 2013 horvath Leave a comment

During recessions many investors wonder whether or not investing in the stock market is a solid investment. They have reason to feel this way. The market peaked on October 9, 2007 at 14,164 and bottomed out at 6,547 on March 9, 2009.

Some investors haven’t forgotten. When polled they believe the market has continued to perform poorly. Actually, the market has come back nicely.

At the end of 2012 it had returned to 12,938 – about 19% of its 2007 peak value. A look at the annual performance of the Dow Jones Industrial Average follows:

• 2007 6.4%
• 2008 -33.8%
• 2009 18.8%
• 2010 11.0%
• 2011 5.5%
• 2012 5.8%.

Improvement in the equity markets is an important part of the recovery. With four years of gains, consumers more confident about their perceived wealth and are more likely to purchase goods and services. As long as consumers are staying within their means, the spending spurs growth in the economy.