Monday, December 28, 2015

Why do so many Dutch people work part time? That and more in today's PEEK of the WEEK from Hagen Financial

Peek of the Week

December 28, 2015

The Markets

It was a short week, but it wasn’t quiet.

Oil prices moved higher, according to The Wall Street Journal, after the U.S. Energy Information Administration reported crude-oil inventories fell unexpectedly last year. Analysts had predicted oil supplies would rise.

One expert cited by The Wall Street Journal suggested the stockpile decline and subsequent oil price rally owed much to Gulf Coast refiners reducing inventories “to mitigate state ad valorem taxes on year-end crude stocks.” If that’s the case, the oil price increase may not be sustained.

Regardless, improving oil prices gave U.S. stock markets a boost. In particular, the Standard & Poor’s 500 Index (S&P 500) benefited from improving performance in the energy sector:

“Of 80 U.S. listed oil and gas producers, all but one – a bankrupt company – rose on the day, with nearly half of the companies up more than 10 percent. Energy shares were the biggest gainers Wednesday in the S&P 500, up 3.8 percent and helped the S&P 500 on the whole gain 1.2 percent in late-afternoon trading.”

Barron’s reported energy stocks had gained 5 percent for the week, but were still off by about 22 percent for the year.

The Organization of the Petroleum Exporting Countries (OPEC) released its World Oil Outlook last week. BBC reported OPEC anticipates oil prices will begin to rise in 2016, although its producers’ share of the market is expected to shrink by 2020 as rival oil-producers proved to be more resilient in the face of low oil prices than had been expected.


Data as of 12/24/15
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
2.8%
0.1%
-1.0%
13.1%
10.4%
5.1%
Dow Jones Global ex-U.S.
1.9
-6.2
-6.6
0.3
-0.7
0.7
10-year Treasury Note (Yield Only)
2.2
NA
2.2
1.8
3.4
4.3
Gold (per ounce)
0.9
-10.6
-8.9
-13.6
-4.9
7.5
Bloomberg Commodity Index
1.3
-24.8
-26.1
-17.3
-13.2
-7.4
DJ Equity All REIT Total Return Index
2.0
2.6
1.7
10.6
11.8
7.2
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

looking back… Each week, The Economist Explains’ blog expounds on subjects ranging from current events to economics, from philosophical or scientific issues to everyday oddities. Let’s take a quick look at a few of its headlines during 2015:

1.      Why the Swiss unpegged the Swiss franc (January 18, 2015). Remember when the Swiss National Bank removed its currency peg last January? The Swiss franc realized double-digit gains in value and the Swiss stock market dropped.
2.      Everything you want to know about falling oil prices (March 18, 2015). “The main reason for falling prices is increased supply from America thanks to its fracking boom, which has reduced its demand for oil imports. Other countries, notably Saudi Arabia, have been loth to curb supply lest they lose their share of the global oil market.”
3.      Why so many Dutch people work part time (May 11, 2015). More than one-half of the working population in Netherlands is employed part-time – a higher percentage than anywhere else in the world. “This is partly a relic of prevailing Christian attitudes which said that mothers should be home for tea time and partly down to the wide availability of well-paid “first tier” part-time jobs.”
4.      What Greece must do to receive a new bail-out (July 14, 2015). After challenging negotiations, Greece and its European creditors cut a deal, allowing the country to remain in the euro area.
5.      China’s botched stock market rescue (July 30, 2015). Chinese stocks lost nearly a third of their value last summer. China’s authorities “resorted to heavy-handed measures to prop up swooning share prices, from pressuring banks to buy stocks to blocking big investors from selling theirs.”
6.      Why is the Nobel prize in chemistry given for things that are not chemistry (October 7, 2015)? Apparently, five of the last 10 Nobel chemistry prizes have been awarded for pursuits that might better be described as biology. A possible explanation is “the diversity of chemistry prizes reflects the fact that chemistry is found everywhere…”
7.      How the Fed will raise interest rates (December 14, 2015). Just as the Fed employed unconventional monetary tools to stimulate the economy, it is using new policy tools to try to increase the Fed funds rate.

We hope 2015 has been a memorable and rewarding year for you, and we look forward to working with you in the New Year.

Weekly Focus – Think About It

“It is not enough to have a good mind; the main thing is to use it well.”
--Rene Descartes, French philosopher, mathematician, and scientist


Best regards,
Leif  M. Hagen
Leif  M. Hagen, CLU, ChFC                                                                       
LP Financial Advisor

Securities offered through LPL Financial Inc.,
Member FINRA/SIPC.

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.
If you would like us to add them to our list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

P.S.S. Also, please remind your friends and family members becoming Medicare eligible that we offer Medicare insurance and Part D options with NO COST to work with Leif as their agent

For more information and resources visit our website at www.HagenFN.com

For Medicare supplement and part D information and resources, please visit MEDICAREforSENIORS.info



Please FOLLOW and “LIKE US” on FACEBOOK.com/HagenFN


Please Follow our Tweets on Twitter.com/SafeLeif

                                                                                               
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be
representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees,
expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S.
Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association.
The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the “Peek of the Week”, please reply to this email with “Unsubscribe” in the subject line, or write us at: Hagen Financial Network, Inc. 4640 Nicols Road, Suite 203; Eagan, MN 55122.


Sources:



Monday, December 21, 2015

Who's policies sent the country into recession in the early 80's? That and more in today's PEEK fo the WEEK from Hagen Financial

                       Peek of the Week
                                            December 21, 2015
The Markets

After a level of hype that would have exhausted even the most dedicated Star Wars fans, the Federal Reserve finally began to tighten monetary policy last week, raising the funds rate from 0.25 percent to 0.50 percent.

Although financial markets appeared sanguine when the rate hike was announced, the calm dissipated quickly. The Standard & Poor’s 500, Dow Jones Industrial, and NASDAQ indices finished the week lower. International markets fared better. Most finished the week higher.

The last five times the Fed has begun to raise rates, the U.S. dollar has remained stable and stock prices have risen, on average, in the months immediately following the hike, according to The Economist.

While tightening monetary policy (and talk of tightening monetary policy) often affects financial markets immediately, economic change happens at a more measured pace. The Economist explained:

“The impact of changes in interest rates is not usually felt on announcement…The response of the real economy also comes with a delay. Most reckon it takes time for monetary policy to shift spending habits, and one rate rise is more an easing of the accelerator than a U-turn. Unemployment continued to fall in each of the past five tightening episodes. That will probably happen again...The most uncertain variable is inflation. This fell rapidly following rate rises in 1983 and 1988 as the Fed established its hawkish credentials. Yet in 2016, the most likely direction for inflation is up (the rate rise is aimed at restraining its ascent).”

Another factor affecting the U.S. and global economies is the price of oil. Last week, The Wall Street Journal reported oil prices declined to a new six-year low. Falling oil prices have contributed to deflationary pressures in Europe, stunting the region’s economic recovery. They have had a mixed affect on the U.S. economy, helping consumers and hurting the energy industry.


Data as of 12/18/15
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
-0.3%
-2.6%
-2.7%
11.5%
10.0%
4.8%
Dow Jones Global ex-U.S.
0.4
-8.0
-7.6
-0.4
-0.8
0.5
10-year Treasury Note (Yield Only)
2.2
NA
2.2
1.8
3.4
4.4
Gold (per ounce)
-0.9
-11.4
-11.4
-14.4
-5.1
7.6
Bloomberg Commodity Index
-1.2
-25.8
-28.6
-18.0
-13.2
-7.8
DJ Equity All REIT Total Return Index
1.6
0.6
0.8
10.3
11.9
7.2
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Second guessing the fed is an age old American pasttime. Americans have been speculating about the Federal Reserve’s monetary policy choices – rate hikes, rate declines, quantitative easing, etc. – for a long time. It’s clear when you take a look at a few modern Fed Chairs and the Fed’s activities under their leadership.

Paul Volcker (1979-1987) took over an economic quagmire known as The Great Inflation. In the early 1980s, U.S. inflation was 14 percent and unemployment reached 9.7 percent. Volcker unexpectedly raised the Fed funds rate by 4 percent in a single month, following a secret and unscheduled Federal Open Market Committee meeting. His policies initially sent the country into recession. The St. Louis Fed reported "Wanted" posters targeted Volcker for "killing" so many small businesses. By the mid-1980s, employment and inflation reached targeted levels.

Alan Greenspan (1987-2006) was in charge through two U.S. recessions, the Asian financial crisis, and the September 11 terrorist attacks. Regardless, he oversaw the country’s longest peacetime expansion. In the late 1990s, when financial markets were bubbly, critics suggested, “…Mr. Greenspan’s monetary policies spawned an era of booms and busts, culminating in the 2008 financial crisis.”

Ben Bernanke (2006-2014) took the helm of the Fed just before the financial crisis and Great Recession. When economic growth collapsed in 2007, the Fed lowered rates and adopted unconventional monetary policy (quantitative easing) in an effort to stimulate economic growth. In 2012, economist Paul Krugman called Bernanke out in The New York Times, “…the fact is that the Fed isn’t doing the job many economists expected it to do, and a result is mass suffering for American workers.”

Janet Yellen (2014-present) is the current Chairwoman of the Fed. Under Yellen’s leadership, after providing abundant guidance, the Fed raised rates for the first time in seven years. The International Business Times reported several prominent economists think the increase was premature, in part, because there are few signs of inflation in the U.S. economy.

In many cases, it’s difficult to gauge the achievements and/or failures of a leader – Fed Chairperson, President, Congressman, or Congresswoman – until the economic or political dust settles. Sometimes, that’s long after they’ve left office.

Weekly Focus – Think About It

“We are too prone to judge ourselves by our ideals and other people by their acts. All of us are entitled to be judged by both.”
--Dwight Morrow, former U.S. Ambassador to Mexico



Best regards,
Leif  M. Hagen
Leif  M. Hagen, CLU, ChFC                                                                       
LP Financial Advisor

Securities offered through LPL Financial Inc.,
Member FINRA/SIPC.







P.S.  Please feel free to forward this commentary to family, friends, or colleagues.
If you would like us to add them to our list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

P.S.S. Also, please remind your friends and family members becoming Medicare eligible that we offer Medicare insurance and Part D options with NO COST to work with Leif as their agent

For more information and resources visit our website at www.HagenFN.com

For Medicare supplement and part D information and resources, please visit MEDICAREforSENIORS.info

 WATCH LEIF's MEDICARE VIDEOS


Please FOLLOW and “LIKE US” on FACEBOOK.com/HagenFN


Please Follow our Tweets on Twitter.com/SafeLeif

                                                                                               
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be
representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees,
expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S.
Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association.
The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the “Peek of the Week”, please reply to this email with “Unsubscribe” in the subject line, or write us at: Hagen Financial Network, Inc. 4640 Nicols Road, Suite 203; Eagan, MN 55122.


Sources:
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_Nav_MAR_hpp (Click on U.S. & Intl Recaps, then on "The long wait (finally) has ended!,” and then scroll down to the Global Stock Market Recap chart) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/12-21-15_Barrons-Global_Stock_Market_Recap-Footnote_2.pdf)




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