On June 30, 1999, the Fed pushed through the first of six interest rate increases in the next year, based on their worries that low unemployment would trigger inflationary wage demands.   All they did was kill a stock market rally and cause the market to decline for the next three years.

The "Jaws" Bear Market of 1974

On June 30, 1974, the famous beach scene from Steven Spielberg's first hit movie, "Jaws," was filmed.  A crowd of 400 screaming, panic-stricken extras in bathing suits ran from the surf – over and over again – until they were panicked enough for Spielberg. What does that have to do with the stock market? Those 400 extras might have been New York stock traders, because the 1974 bear market began in earnest on July 1. 

Traders perfected their Jaws panic scene each day, as the market crashed as relentlessly as a pounding surf in the second half of 1974.  The Dow fell from 806 on July 1 to 584 on October 4th (down 27.5% in the quarter).  The theme from Jaws must have been piped onto the floor of the exchange any time investors put their toes back in the water. 

How Will The Market Perform in the Second Half?

With the exception of the disputed election of 2000, the second half of Presidential election years has been positive in the S&P 500 index since 1960. Since 1972, the average gain has been +6.4%.

Second Half of Election Years
Year           S&P 500
1972           +10.18%                     
1976             +3.05%                     
1980           +18.84%                                 
1984             +9.18%                     
1988             +1.54%          
1992             +6.76%                     
1996           +10.45%
2000              -8.98%
2004             +6.23%  

June 30, 1906: The Birth of the FDA

President Theodore Roosevelt, using the same aggressive leadership that worked on June 29 with the ICC, obtained passage of the Meat Inspection Act and the Pure Food and Drug Act on June 30.  The passage of the Meat Act was spurred by Upton Sinclair's famous muckraking novel, The Jungle, which raked through mucky meats and unsanitary conditions in the Chicago stockyards. The Jungle was fiction but was taken as fact. 

Like many authors of his day (such as Jack London, who wrote the Preface to The Jungle), Sinclair was a doctrinaire socialist with a radical agenda: His novel promoted the Socialist Party as the solution. Sinclair donated his royalties to a commune, while saying "I aimed at the public's heart and by accident hit them in the stomach."  

Another Sinclair Scandal!

June 30, 1924, the Teapot Dome scandal reached a peak, as a federal grand jury indicted Albert B. Fall, former Secretary of the Interior, along with Harry Sinclair, president of the Mammoth Oil Company, and two others, on charges of bribery and conspiracy to defraud the U.S.  Sinclair was accused of bribing Secretary Fall $100,000 to secure a lease for Teapot Dome in Wyoming.

American Businesses, Products & Careers Born on June 30

1921: The Radio Corporation of America (RCA) was incorporated.  Under the leadership of a young immigrant, David Sarnoff, RCA soon topped its main competitor, General Electric (GE).

1936: Margaret Mitchell's "Gone with the Wind" was published in New York City.

1939: Frank Sinatra, a skinny 23-year-old kid from Hoboken (NJ), made his first appearance with the Harry James' big band this night, at the Hippodrome Theatre in Baltimore, Maryland.

1953: The first Corvette came off Chevy's assembly line in Flint, Michigan. Price: $3,250. 

Tech News from the Late 1940s

On June 30, 1945, John von Neumann, a prominent mathematician who worked on the Los Alamos atom bomb project, delivered his proposal for creating a stored, programmable memory.

On June 30, 1946, the U.S. Army officially accepted ENIAC (Electronic Numerical Integrator and Computer), the world's first electronic general-purpose digital computer, built by a team of engineers at the University of Pennsylvania, headed by John Mauchly and Presper Eckert.

On June 30, 1948, John Bardeen, Walter Brattain, and William Shockley demonstrated their invention, the transistor, for the first time. Transistors quickly replaced unwieldy vacuum tubes in most electronic devices. For this work, the three men won the Nobel Prize for physics in 1956.

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