UnitedHealth Group Inc. (UNH), Alcoa Inc (AA) – The Federal Reserve and Volatility: More Bark Than Bite

Page 1 of 2

If you thought last month was volatile, you were on to something. News that the Federal Reserve could soon reduce its support for the economy sent the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) barreling up or spiraling down by triple-digit margins in 16 of the month’s 20 trading sessions. But at the end of the day, the reaction to the Fed’s announcement turned out to be far more bark than bite.

UnitedHealth Group Inc

Let me be clear: June was anything but docile for investors. The average daily movement of the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) was 136 points. This was the highest average since the year 2000, and it handily beat out the runners-up (2012 and 2008), which came in at an average of 115. In addition, as I alluded to, a full 80% of the trading days closed either higher or lower by a triple-digit margin.

Year Average Daily Move (Points) No. of Trading Days No. of Triple-Digit Moves % of Triple-Digit Moves
2013 136 20 16 80%
2012 115 21 9 43%
2008 115 21 11 52%
2002 102 20 12 60%
2010 101 22 10 45%
2000 97 20 10 50%
2011 95 22 9 41%
2006 80 22 6 27%
2007 79 21 7 33%
2001 75 21 7 33%
2009 67 22 5 23%
2003 66 21 5 24%
2004 48 21 1 5%
2005 42 22 4 18%

Source: Yahoo! Finance

If one were to stop here, it’d be tempting to conclude that last month was the most volatile June on record, or at least since the turn of the century. But, as you may have guessed, there’s more to the story.

Take a look at the following table. By these measurements, June was actually a comparatively pedestrian month. Average daily volume was the second lowest in the past 14 years. And it was in the middle of the pack in terms of both the average daily percentage movement and the aggregate change (in absolute points and percentage) between the beginning and the end of the month.

Year Average Daily Volume Average Daily Movement Total Point Movement Total Movement (%)
2006 3,149,845 0.73% (18) (0.16)
2002 2,891,860 1.06% (682) (6.87)
2008 2,528,548 0.94% (1,288) (10.19)
2009 2,510,945 0.78% (53) (0.63)
2007 2,489,343 0.59% (219) (1.61)
2003 2,375,167 0.73% 135 1.53
2001 2,326,814 0.69% (410) (3.75)
2005 2,283,355 0.40% (193) (1.84)
2010 2,246,218 1.00% (363) (3.58)
2004 1,957,671 0.46% 247 2.42
2011 1,762,027 0.79% (155) (1.24)
2000 1,726,040 0.91% (74) (0.71)
2013 1,494,224 0.91% (206) (1.36)
2012 1,422,186 0.92% 487 3.93

Source: Yahoo! Finance.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Bloodiest UFC Fights Ever Fought

Most Expensive Rum Brands in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!