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Dow Jones stock index crosses 40,000: Good or bad for California?

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Dow Jones stock index crosses 40,000: Good or bad for California?


The stock market’s venerable yardstick, the Dow Jones Industrial Average, just made history – crossing 40,000 for the first time.

Yes, this milestone set Thursday, May 16, is only a brief emotional victory for shareholders. Yet it can be seen as a historical milepost for the broader business climate, especially in California.

To honor the moment, the trusty spreadsheet reviewed the Dow’s 5,000-point markers and how California fared in those periods using an economic metric (California unemployment), an interest rate (the average 30-year fixed mortgage), and home prices from the California Association of Realtors.

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As we begin our data-filled voyage, let’s note the Dow first crossed 5,000 in November 1995 — back when you could buy the median-priced California single-family home for $176,000.

5,000-point mileposts

Dow passes 10,000 in December 1999: It took the stock index just over four years to double from 5,000 compared with a 28% gain for California homes to $225,000 in the same timeframe. This was an era when the economy broke loose from its early 1990s slumber. California unemployment dipped between 1995 and 1999 to 5% from 7.9% while mortgage rates rose to 7.9% from 7.4%.

15,000 in May 2013: The Dow needed more than 13 years to gain 50% to hit this benchmark vs. an 85% surge for homes statewide to $417,000 in the same period. This extended gap came during the financial rollercoaster ride from the bubble period in the early 2000s bursting into a Great Recession and then the economy’s slow recovery. So, California unemployment was 9.2%, up from 5% at the beginning of this crazy period. Yet, cheap money was one salve: 3.5% mortgages vs. 7.9% in 1999.

20,000 in January 2017: The Dow took under four years to gain 33% to gain the next 5,000 while homes statewide gained 18% to $492,000 as the post-crash rebound continued. California unemployment fell to 5.2% from 9.2%  as mortgage rates ticked up to 4.2% from 3.5% in 2013.

25,000 in January 2018: The Dow needed just one year to gain 25% for its next benchmark vs. a 7% gain for California homes to $528,000 as the recovery hit full stride. California unemployment dipped to 4.4% from 5.2% while mortgage rates slipped to 4% from 4.2% in 2017.

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30,000 in November 2020: The index took just under three years to gain 20% vs. 32% for California homes to $699,000 in the middle of the pandemic’s business wild gyrations. California unemployment surged to 9% from 4.4%  – but investors cheered historically cheap money such as mortgages hitting 2.8%, falling from 4% in 2018.

35,000 in July 2021: It took the Dow less than a year to gain 17% vs. 16% appreciation for California homes to $811,000 as the pandemic’s economic surge was in full force. Statewide unemployment fell to 7.4% from 9% and mortgages remained cheap – 2.9% vs. 2.8% in 2020.

40,000 in May 2024: The Dow took almost three years to gain 14% vs. an 11% gain for California homes to a record $904,000 in April. The economy struggles to find its new normal as statewide unemployment fell to 5.3% in April from 7.4%. But mortgages got expensive as the Federal Reserve fought and overheated economy – 7% in April from 2.9% in 2021.

Bottom line

So, the Dow is up eight-fold since crossing 5,000 just over 28 years ago. California homes are only five times more expensive.

That’s not the point, though. This stroll down memory lane reminds us that the markets typically need a solid economy for stocks or homes to appreciate. Cheap money is the icing on the cake.

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Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

 



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California

SpaceX launches 20 Starlink satellites from California (photos)

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SpaceX launches 20 Starlink satellites from California (photos)


SpaceX launched another batch of its Starlink internet satellites to orbit early Sunday morning (Nov. 24).

A Falcon 9 rocket carrying 20 Starlink spacecraft — 13 of which are capable of beaming service directly to smartphones — lifted off from California’s Vandenberg Space Force Base on Sunday at 12:25 a.m. EST (0525 GMT; 9:25 p.m. on Nov. 23 local California time). 

The Falcon 9’s first stage returned to Earth about eight minutes after liftoff as planned, touching down on the SpaceX droneship “Of Course I Still Love You” in the Pacific Ocean.

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The first stage of a SpaceX Falcon 9 rocket rests on the deck of a droneship shortly after launching 20 Starlink internet satellites to orbit from California’s Vandenberg Space Force Base on Nov. 24, 2024. (Image credit: SpaceX)

It was the 15th launch and landing for this particular booster, according to a SpaceX mission description. Twelve of those flights have been Starlink missions.

The Falcon 9’s upper stage hauled the 20 Starlink satellites to low Earth orbit, deploying them there about an hour after liftoff as planned, SpaceX reported in a post on X.

Sunday’s launch was the 115th Falcon 9 flight of the year. Nearly 70% of those liftoffs have been devoted to building out Starlink, the largest satellite constellation ever assembled.

The megaconstellation currently consists of more than 6,600 active satellites, and, as Sunday’s mission shows, it’s growing all the time.



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Northern California driver dies after vehicle found in floodwaters, 1 other found dead

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Northern California driver dies after vehicle found in floodwaters, 1 other found dead


PIX Now morning edition 11-23-24

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PIX Now morning edition 11-23-24

09:29

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SONOMA COUNTY – A man died when he was found in a flooded vehicle after an atmospheric river dumped heavy rain in Northern California, authorities said.

In Sonoma County’s Guerneville, first responders responded to a report around 11:30 a.m. Saturday for a vehicle that was seen in floodwaters near Mays Canyon Road and Highway 116.

The caller believed that at least one person was inside the vehicle.

When crews arrived, they said the vehicle was recovered but a man was pronounced dead at the scene. He has not been identified.

The Russian River, which flows through Guerneville, reached the flood stage on Friday evening and exceeded what was forecasted.

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This area went into a flood warning around 2 p.m. Friday and was still in place as of Saturday afternoon.

Guerneville is about 75 miles north of San Francisco.

Around 8:45 a.m. Saturday in Santa Rosa, a man was found dead in Piner Creek just south of Guerneville Road, the police department said. His death is being investigated. 

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Laura Richardson completes a political comeback, winning tight race to represent South L.A. in the California Capitol

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Laura Richardson completes a political comeback, winning tight race to represent South L.A. in the California Capitol


Laura Richardson emerged the victor of the competitive, costly and feisty election to win a South Los Angeles seat in the state Senate — completing her political comeback more than 10 years after a tumultuous tenure in the House of Representatives.

Richardson narrowly won the race against Michelle Chambers, a community justice advocate who faced accusations of misconduct in prior public office. The Associated Press called the race Friday after weeks of ballot counting.

The contest between two Democrats with similar social policies but differing views on crime and business attracted huge spending by special interests.

Independent expenditure committees poured more than $7.6 million into the race, making it the most expensive election for state Legislature this year, according to California Target Book, a political database. Negative campaigning dominated the race as business interests and labor unions battled for their favored candidate.

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Richardson, a moderate Democrat, will join a Democratic supermajority in the Legislature. But Republicans are on track to flip three legislative seats this year, one in the Senate and two in the Assembly.

Richardson’s biggest supporters were businesses, including PACs funded by oil companies, and law enforcement associations that said they advocated for candidates who shared their beliefs on free enterprise and public safety. Meanwhile, Chambers’ biggest portion of support came from healthcare workers and teachers unions, who spent millions of dollars backing her.

Chambers wrote in a statement she was “proud of the campaign we ran,” thanking supporters who canvassed, phone-banked or cast votes for her “vision of better jobs, better wages and a California that works for everybody, not just the wealthy and well-connected.”

“This was the closest state senate race in the state, but unfortunately it appears that we will fall just short of victory,” she added. “Our people-powered efforts were not quite enough to overcome millions of dollars in outside spending on lies from the oil and tobacco industry and their allies.“

Richardson will succeed Sen. Steven Bradford (D-Gardena) in the 35th District, which encompasses the cities of Carson, Compton and stretches down to the harbor. Bradford, who had endorsed Chambers, said he believed both candidates were “qualified to do the job.”

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Bradford, who championed reparations legislation during his tenure, hoped the future senator would be “willing to meet with all factions of the community, because it’s a great diverse need in this district.”

“I’m also deeply sad to see how negative this campaign was, probably one of the most negative campaigns I’ve experienced in my 30-plus years of being involved with elections,” he said. “I just hope that we can come together after such a negative campaign, regardless of who the victor is, and understand that we have to work together.”

Richardson and Chambers took aim at each other’s past controversies. For Chambers, who had picked up the endorsement of various state and local elected officials, opposition groups seized on a criminal misdemeanor charge from 30 years ago. She was also accused of bullying and intimidation from her time as a Compton City Council member, allegations that she has repeatedly denied.

Richardson faced criticism over her tenure in Congress, where a House Ethics Committee investigation found her guilty in 2012 of compelling congressional staff to work on her campaign. The committee report also accused Richardson of obstructing the committee investigation “through the alteration or destruction of evidence” and “the deliberate failure to produce documents.”

Richardson admitted to wrongdoing, according to the report, and accepted a reprimand and $10,000 fine for the violations. She previously said that during her time in Congress, Republicans frequently targeted members of the Black Caucus. After she lost her reelection bid for a fourth term, Richardson said she worked at an employment firm to improve her managerial skills and has recognized previous mistakes.

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“It’s been said voters are very forgiving, and if you stand up and you accept responsibility and you improve in the work that you do — we need people who’ve been through things, who understand what it’s like to have had difficulties,” she previously told The Times. “And so that’s exactly what I did. I didn’t shy away from it.”



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