Dow Jones Indexes | Dow Jones Indexes Blog

Dow Jones Indexes | Dow Jones Indexes Blog

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China Veep-Obama Visit Puts Spotlight on Nations' Intertwined Economies

February 15, 2012 |  by David Krein  |  Market Commentary  |  0 Comments

China’s Vice President Xi Jinping, widely anticipated to assume the presidency from Hu Jintao next year, kicked off his “getting-to-know-you tour” of the U.S. yesterday by meeting with President Obama at the White House. Today, in meetings with top senators and House members, key discussion points included trade issues, intellectual property rights and the valuation of China’s currency. In a statement that neatly encapsulates the economic agenda, Xi told the Washington Post, “We will continue to press ahead with the reform of the RMB exchange rate formation mechanism and offer foreign investors a fair, rule-based and transparent investment environment. At the...
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Chart of the Week: The Dow and Consumer Sentiment

February 13, 2012 |  by Jamie Farmer  |  Market Commentary  |  0 Comments

A preliminary February report released Friday by the Thomson Reuters/University of Michigan Survey of Consumers indicates that consumer sentiment is once again on the decline. As measured by the survey’s Sentiment Index, consumer confidence fell to 72.4 from last month’s score of 75. The weakening of the indicator marked a reversal of its five-month climb since August, when it stood at just 55.8 amid news of the European debt crisis and S&P’s downgrade of U.S. government debt. According to Bloomberg, the survey further found that Americans’ willingness to make big purchases on items like cars decreased to 79.6 from 84.2 in...
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Why AAPL and GOOG Aren't in The Dow

February 8, 2012 |  by John Prestbo  |  Miscellaneous  |  3 Comments

Apple recently retook the throne as the world's most valuable company, stripping the title from energy giant ExxonMobil. For the folks on our customer support desk, this means one thing: They can expect a few questions over the coming weeks about whether Apple might be added to the Dow Jones Industrial Average. (And the next question is usually: What about Google?) To understand why these companies aren’t currently included in the index, let’s first take a step back and consider The Dow’s mission: To reliably measure the performance of the U.S. stock market. This is a mission that The Dow fulfills quite...
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Taking the Measure of Davos

February 3, 2012 |  by David Krein  |  Miscellaneous  |  0 Comments

World leaders retreated from the snowcapped mountains of Davos this week, returning from the four-day World Economic Forum Annual Meeting. While the confab may not have solved the world's ills, at least a handful of them came into sharper focus. Chief among these was the issue of Greece's potential agreement with its bond holders and the EU's ability to hold together over the next five years. By many reports, the continent's leaders were given an earful (Dow Jones, Reuters, PBS Newshour) on the need to resolve the crisis quickly. And it sent no small signal when Christine Lagarde of the...
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What Sector Will Facebook Fit Into?

February 3, 2012 |  by Jamie Farmer  |  Index Mechanics  |  0 Comments

Facebook's S-1 has been filed, but what indexes will the company be placed into once it goes public? The answer will have a ripple effect through numerous market measures and products. We've gotten a lot of questions in recent days on the matter, including inquiries as to what sector indexes will be impacted. At this point we can say that while a company's classification is always important, it is not always obvious. For example, Twitter's CEO this week said "Twitter is not a media company." This despite the fact that much of its revenue is derived from advertising. Regular readers of...
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When News Strikes: How We Account for Corporate Actions

January 30, 2012 |  by David Krein  |  Index Mechanics  |  0 Comments

Quick: What does an “index provider” do? If you can’t fully answer this question, you’re not alone. For those of us who work at Dow Jones Indexes and similar firms, it’s striking to realize sometimes how little-understood our industry is. For sure, most investment professionals are aware that we calculate indexes and select the stocks that go into them. Far fewer, though, know that another crucial service we provide is ongoing index maintenance. By “ongoing index maintenance” I’m primarily referring to a resource-intensive function that includes tracking and accounting for thousands of corporate actions—events such as mergers, spinoffs and share repurchases that...
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The Fed's Magic Number? 2%

January 26, 2012 |  by John Prestbo  |  Market Commentary  |  0 Comments

The Federal Reserve announced yesterday a 2% target for inflation, advancing Ben Bernanke’s longstanding efforts to offer greater transparency into the bank’s policy decisions by publicly stating a numerical goal. Describing recent inflation as "subdued,” the Fed said it would keep interest rates near zero into late 2014, and suggested that more stimulus may be needed if inflation were to remain below the 2% target level for a prolonged period. The Fed’s subdued forecast for inflation appears to be largely aligned with the market’s consensus expectations, based on a read of the Dow Jones Credit Suisse Inflation Breakeven Indexes. Over the past...
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