PEEK OF THE WEEK
April 24, 2017
Leif Hagen & Donna Roberts
The Markets
Last week,
investors multi-tasked, pushing both U.S. bond and stock markets higher.
In March, the Federal Reserve
raised the Fed funds rates for the second time in three months. Typically, we
would expect interest rates to rise and bond prices to fall, but interest rates
have been falling and bond prices have been moving higher. Barron’s reported yields on 10-year Treasuries hit their lowest
levels since the election last week.
Reuters explained there has been a shift in expectations:
“Bonds prices have been boosted in
recent weeks by reduced expectations that the Federal Reserve will raise
interest rates two more times this year, following disappointing economic data
releases. Still, Fed Vice Chair Stanley Fischer said on Friday that two more
U.S. rate increases this year remain an appropriate plan for the Federal
Reserve despite some weak recent economic data.”
Geopolitical anxiety continued
to play a role in market performance, too, causing investors to flee to safe
havens, which contributed to bond market strength.
Geopolitics didn’t cause U.S.
stock markets to swoon, though. Barron’s
reported:
“Stocks’ on-again, off-again rally
was on again last week, and it took the Standard & Poor’s 500 index to
within sniffing distance of its March 1 record. Climbing in the face of
geopolitical anxiety from Paris to Pyongyang is bullish, as is preserving the
upward slope of the index’s 200-day average. But there are signs of wavering
conviction…”
That wavering conviction is
found in investors’ preference for a small group of tech stocks, as well as
more defensive sectors of the market. Through mid-April, just 10 stocks
accounted for one-half of the S&P 500’s gain during 2017.
A possible
motto for 2017: Expect the unexpected.
Data as of 4/21/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
0.9%
|
4.9%
|
12.3%
|
7.9%
|
11.4%
|
4.7%
|
|
Dow Jones Global ex-U.S.
|
0.2
|
7.1
|
6.6
|
-1.4
|
3.1
|
-1.4
|
|
10-year Treasury Note (Yield
Only)
|
2.2
|
NA
|
1.9
|
2.7
|
1.9
|
4.7
|
|
Gold (per ounce)
|
-0.2
|
10.6
|
2.6
|
-0.1
|
-4.7
|
6.4
|
|
Bloomberg Commodity Index
|
-2.8
|
-4.1
|
0.4
|
-15.1
|
-9.5
|
-7.0
|
|
DJ Equity All REIT Total Return
Index
|
0.9
|
5.4
|
11.3
|
10.9
|
11.1
|
5.0
|
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.
mobile technology: the next generation. Faster
and more efficient mobile phones are on the horizon. That’s right, 5G is almost
here, according to Network World.
If you were never quite sure
what distinguished 1G from 2G, or 3G from 4G, much less 4G from 5G, the answer
depends on whom you ask (or in this case, what you read). PC Magazine explained the technology:
“1G was analog cellular. 2G
technologies, such as CDMA, GSM, and TDMA, were the first generation of digital
cellular technologies. 3G technologies, such as EVDO, HSPA, and UMTS, brought
speeds from 200kbps to a few megabits per second. 4G technologies, such as
WiMAX and LTE, were the next incompatible leap forward, and they are now
scaling up to hundreds of megabits and even gigabit-level speeds.”
The Economist, on the other hand, explained the benefits to users:
speed of communication. 5G is different from earlier generations of wireless
broadband because it can:
“…send and receive signals almost
instantaneously. The “latency” (i.e., the lag between initiating an action and
getting a response) that has hobbled mobile phones will be a thing of the past.
When 3G phones were the bee's knees, the time taken for two wireless devices to
communicate with one another was around 500 milliseconds. That half-second lag
could make conversation frustrating. A decade later, 4G had cut the latency to
60 milliseconds or so – not bad, but still an age when waiting for crucial,
time-sensitive data, especially from the cloud.”
5G mobile networks may be up and
running by the time the South Korean Winter Olympics roll around in 2018,
according to The Economist.
Weekly
Focus – Think About It
“Try putting your iPhones down
every once in a while, and look at people’s faces.”
--Amy Poehler, Comedian
Best Regards,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LP Financial Advisor
Securities offered through LPL Financial Inc., Member FINRA/SIPC.
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* 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
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Sources:
http://www.barrons.com/articles/the-burt-reynolds-stock-market-1492836727?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-24-17_Barrons-The_Burt_Reynolds_Stock_Market-Footnote_3.pdf)
https://www.economist.com/news/science-and-technology/21720916-ready-or-not-5g-wireless-preparing-its-big-day-makeover-mobile-phones (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-24-17_TheEconomist-Makeover_for_Mobile_Phones-Footnote_6.pdf)
