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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

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!