Long Term Perspective

 

 

The Wilshire 5000 is the most comprehensive of market indicators. It includes all publicly traded U.S.-based companies – now more than 7000.  The Wilshire 5000 until mid-2009 had an association with the Dow Jones companies but switched to an association with Nasdaq. Dow Jones now calculates a comprehensive index intended to match the methodology of the Wilshire 5000 (but does differ slightly).  It is called the Dow Jones Total Stock Market Index.  However, the official Wilshire 5000 (from the Nasdaq site) continues to be referenced here. The Wilshire 5000 jumped 31.4 percent in 2013 after gaining 13.7 percent in 2012.   The 10-year average improved to 8.1 percent from 7.9 percent the prior year.

 

Short Term Perspective

 

 

The Wilshire 5000 is widely monitored by Fed officials because this index indicates the pattern of consumer wealth, reflecting changes in the broad equities market. The "wealth effect" is the concept that consumers are more likely to spend more money on goods and services when the stock market is appreciating. Conversely, consumers could curtail spending when the stock market is declining.

 

Stronger economic data and reversal of worries over European sovereign debt supported stocks in October 2011 and in early 2012.  Again, re-heightened concern about European debt pushed equities down in mid-2012 with a moderate rebound in latter 2012.  However, slower economic growth and fiscal cliff worries weighed on stocks in the second half of 2012, softening gains.  Favorable economic news lifted stocks in early 2013, along with earnings and progress on Cyprus bank debt.  Concern about an early cut back in Fed asset purchases led stocks down in mid-2013.  A lessening of worries about the impact of Fed tapering in latter 2013 helped to lift stocks.  But slower growth, somewhat disappointing corporate news, and overseas concerns slowed equities in 2014.

 

The Wilshire 5000 in September was up 15.4 percent on a year-on-year basis, compared to 22.4 percent in August.

 

 

The Wilshire 5000 fell 2.2 percent in September, following a rebound of 4.0 percent the prior month.