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Keep up with the latest US financial news and get expert analysis on what’s happening in the markets today.
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US Stock Market
The US stock market is a collection of markets where stocks (pieces of ownership in businesses) are traded between investors. It usually refers to the exchanges where stocks and other securities are bought and sold.The stock market is just one part of the financial market, which also includes the bond market and the foreign exchange market.
Dow Jones Industrial Average
The Dow Jones Industrial Average is a stock market index that gauges the performance of 30 large, publicly traded companies based in the United States. The Dow is one of the oldest and most widely used indexes in market history, and it is particularly important because it captures the pulse of America’s industrial sector.
The Dow Jones Industrial Average is a price-weighted index, which means that each stock in the index is weighted according to its price per share. The higher the price of a stock, the greater its weight in the index. For example, if Company A has a share price of $100 and Company B has a share price of $200, then Company B would have twice the weight of Company A in the index.
The size of each company in the Dow Jones Industrial Average also affects its weight. For example, if two companies have identical share prices, but one company has twice as many shares outstanding as the other company, then the first company will have twice the weight of the second company in the index.
Dow Jones Industrial Average is one of the most widely quoted equity indexes in existence, and it is often used as a proxy for the overall American stock market.
S&P 500
The S&P 500, or simply the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices, and many consider it to be one of the best representations of the U.S. stock market. The index includes 500 companies from a cross-section of industries, including consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials and utilities.
Nasdaq Composite
The Nasdaq Composite is a stock market index of the common stocks and similar securities listed on the Nasdaq stock market. It is highly followed in the U.S. as an indicator of the performance of technology stocks and growth companies. The index includes all NASDAQ-listed stocks that are not in the Dow Jones Industrial Average, Russell 1000 Index or S&P 500 Index. The Foreign Ownership Rule, which was put into effect in 1975, says that a company must be at least 50% owned by U.S. citizens to be included in the index.
The Nasdaq Composite was first published in 1971 by the NASDAQ Stock Exchange. At that time, it was simply a list of all stocks traded on the exchange with no weights or value attached to them. In 1985, Nasdaq introduced two new indexes: the Nasdaq 100, which consists of all stocks tradeable on Nasdaq except for those that are also in the Dow Jones Industrial Average or S&P 500, and the Nasdaq Financial 100, which consists of all financial companies traded on Nasdaq except for those also in the Dow Jones Industrial Average or S&P 500. In 1995, Nasdaq redesigned both indexes to use a capitalization-weighting methodology similar to that used by Standard & Poor’s for its S&P 500 Index
US Bond Market
The US bond market is the biggest and most important in the world. It is where US government debt securities are traded. The US bond market is also where most corporate bonds and many foreign government bonds are traded.
US Treasury Bonds
The US Treasury Department issues bonds as a way of borrowing money from investors to finance the federal government’s activities. The bonds are issued in denominations of $100, $1,000, $5,000, and $10,000 and have interest rates and maturities that vary depending on the type of bond.
Treasury bonds are usually issued with a maturity of 30 years, but they can be issued with maturities of up to 50 years. Interest on the bonds is paid semi-annually.
The US government also issues treasury notes, which are similar to bonds but have maturities of 2, 3, 5, 7, and 10 years. Treasury notes do not have a fixed interest rate; instead, their interest rate is set at auction when they are first issued.
Treasury bills are short-term debt instruments with maturities of 4, 13, 26, and 52 weeks. They do not pay interest; instead, they are sold at a discount from their face value and mature at that value. For example, a 52-week treasury bill might be sold for $9800 and would mature one year later at $10,000.
US Municipal Bonds
Municipal bonds are issued by state and local governments to finance public works such as roads, bridges, and schools. The interest you earn on municipal bonds is exempt from federal income tax, and in some cases, state and local taxes. This makes them an attractive investment for people in high tax brackets.
Municipal bonds are generally divided into two categories: general obligation (GO) bonds and revenue bonds. GO bonds are backed by the full faith and credit of the issuing government, which means that the government has pledged to use its taxing power to repay the bonds if necessary. Revenue bonds are backed by the revenue from a specific project, such as a toll road or a parking garage.
The yield on municipal bonds is usually lower than the yield on comparable treasury securities because of the tax exemption. However, municipal bond yields have been rising in recent years as investors have become more concerned about the potential for defaults.
Municipal bond prices fluctuate daily, and the price of a bond can be affected by factors such as changes in interest rates, credit ratings, and market conditions. It’s important to work with a financial professional who can help you understand the risks involved in investing in municipal bonds.
US Dollar
The US Dollar is the currency of the United States of America. The US dollar is the most traded currency in the world. The US dollar is also the world’s reserve currency. The US dollar is the currency of choice for many international transactions.
US Dollar Index
The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of US trade partners’ currencies. The USDX started in 1973. The index, USDX, is a geometrically weighted average of the following currencies: Euro (EUR), Japanese Yen (JPY), Pound Sterling (GBP), Canadian Dollar (CAD), Swedish Krona (SEK) and Swiss Franc (CHF).
US Economic News
The US economy added 164,000 jobs in July, according to the Bureau of Labor Statistics, and the unemployment rate fell to 3.9%. Job gains were seen in several industries, including healthcare, transportation, and warehousing. The report also showed that wages increased by 2.7% in the past year.
US Gross Domestic Product
The US Gross Domestic Product (GDP) is a measure of the value of all goods and services produced in the economy. It is the most popular and well-known measure of economic activity. The GDP can be divided into four major components:
-Personal consumption: This includes spending by households on goods and services.
-Investment: This includes spending on business investment, such as factories and equipment, and residential investment, such as new home construction.
-Government spending: This includes spending by all levels of government on goods and services.
-Net exports: This is the value of exports minus imports. Exports add to GDP while imports subtract from GDP.
US Consumer Price Index
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. Average price data for select items are also available. The CPI can be used to recognize periods of inflation and deflation, and to correct economic data for price changes so that all dollars have comparable buying power over time.
The CPI market basket is developed from detailed expenditure information provided by families and individuals across the United States who participate in the Consumer Expenditure Surveys conducted by the Bureau of Labor Statistics (BLS). From this information, BLS creates detailed expenditure weights, which show the relative importance of each item in the CPI market basket among all urban consumers. These relative importance weights are updated every two years, with intervening interpolations made to maintain continuity between surveys.
US Unemployment Rate
The US unemployment rate is the percentage of people in the labor force who are not working but are actively looking for work. The labor force includes people who are employed as well as those who are unemployed.
The unemployment rate for October 2020 was 6.9%, down from 7.9% in September and from 8.4% in August, according to the Bureau of Labor Statistics (BLS). The unemployment rate has been falling since it peaked at 14.8% in April 2020, when the country was in the early stages of the Covid-19 pandemic.
The number of unemployed people fell by 1.4 million in October to 10.8 million, while the number of employed people rose by 2.2 million to 158.5 million. The employment-population ratio, which is the percentage of people aged 16 or over who are employed, increased by 0.5 percentage points to 61.7%.
The US labor market has been slowly recovering since April, when the Covid-19 pandemic caused widespread layoffs and job losses. In recent months, job growth has accelerated as businesses reopen and consumers spend more money.
The October jobs report showed that job gains were widespread across sectors, with notable increases in employment in leisure and hospitality, retail trade, education and health services, and manufacturing. Employment in government also increased over the month.
