Peek of the Week
October 12, 2015
The Markets
They’re
investors. They’re allowed to change their minds.
Just a few
weeks ago, on September 17, the Federal Reserve Open Market Committee (FOMC)
decided to leave the fed funds rate unchanged. In part, this was because,
“Recent global economic and financial developments may restrain economic
activity somewhat and are likely to put further downward pressure on inflation
in the near term.”
The next day,
September 18, stock markets tumbled. By the time September was over, many markets
had closed on their worst quarter in four years, according to the BBC. The Dow Jones Industrial Average
fell by almost 8 percent, Britain’s FTSE 100 was down 7 percent, Germany’s Dax was
off by almost 12 percent, and the Shanghai Composite lost more than 24 percent.
Last week, on
Thursday, the minutes of the FOMC meeting were released. Investors’ response
was quite different. Barron’s
reported many believe a rate hike during 2015 is less likely than it once was,
and that reinvigorated investor optimism:
“Going into
Friday’s session, global equity markets’ valuations were enriched by some $2.5
trillion, according to Bloomberg calculations. As for U.S. stocks, Wilshire
Associates reckons that they tacked on 3.44 percent, or approximately $800
billion, over the full week, based on the gain in the Wilshire 5000 index,
their biggest weekly gain in nearly 12 months.”
Why does the
same news elicit two very different responses? There are many reasons. Foremost
among them is the fact a lot of elements influence markets – investor
confidence, company valuations, central bank actions, automated trading, and many
others.
What does last
week’s upward push mean? One analyst cited by Barron’s suggested we’re seeing a bear market rally, but only time
will tell.
Data as of 10/9/15
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
3.3%
|
-2.1%
|
4.5%
|
11.8%
|
11.6%
|
5.4%
|
Dow Jones Global ex-U.S.
|
5.5
|
-3.5
|
-4.5
|
2.8
|
0.4
|
1.7
|
10-year Treasury Note (Yield Only)
|
2.1
|
NA
|
2.3
|
1.7
|
2.4
|
4.4
|
Gold (per ounce)
|
1.0
|
-4.0
|
-6.1
|
-13.4
|
-3.2
|
9.3
|
Bloomberg
Commodity Index
|
3.6
|
-12.8
|
-23.4
|
-14.9
|
-8.9
|
-6.2
|
DJ Equity
All REIT Total Return Index
|
3.4
|
0.0
|
10.8
|
10.8
|
12.0
|
7.8
|
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.
do you Hate doing the laundry? Then, you
May be in luck. The world’s most
recent laundry bot was introduced at Japan’s 2015 Combined Exhibition of
Advanced Technologies (CEATEC), a technology trade show. The Telegraph reported the robot was developed to eliminate the
tedium of laundry, which (as moms and dads everywhere know) is one of the least
popular household chores. Not only does ‘Laundroid’ wash and dry clothes, it
also can sort them, fold them, and put them away in a cupboard.
If
you’re thinking, it sounds to good to be true, you’re right – for now. Digital Trends pointed out Laundroid
works quite slowly:
“The
last laundry-folding robot we saw in action took a long time to get a
small towel neatly folded into a little rectangle, and that was with the video
sped up. Laundroid is no faster, based on a demonstration at the CEATEC...It
took several minutes for the robot – hidden inside a futuristic-looking black
cabinet – to fold up a freshly washed T-shirt, according to Engadget. Although
it did the task decently, if not in Martha Stewart-approved style, it’s
obviously not ready to take on a basket full of jeans and sheets.”
The
fly in the ointment is the bot must determine a shirt is a shirt, and a pair of
pants is a pair of pants, and so on, before it can fold items. After all, each
item is folded differently. Socks, it seems, pose a particularly ticklish
challenge. So, how long does it take? Laundroid needs about seven hours to fold
a basket of clothes.
If
you have a lot of laundry, you may want to check back in a few years.
Weekly Focus – Think About It
“Human subtlety will never devise an
invention more beautiful, more simple, or more direct than does nature because
in her inventions nothing is lacking, and nothing is superfluous.”
--Leonardo da
Vinci, Inventor
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.
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Sources:
http://www.barrons.com/articles/stocks-rise-more-than-3-as-investors-regain-their-stride-1444457045?mod=BOL_hp_we_columns (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/10-12-15_Barrons-Stocks_Rise_More_than_3_Percent_as_Investors_Regain_Their_Stride-Footnote_4.pdf)
http://www.barrons.com/articles/u-s-debt-ceiling-drama-1444451519?mod=BOL_hp_we_columns (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/10-12-15_Barrons-US_Debt-Ceiling_Drama-Bad_Actors_Tired_Script-Footnote_5.pdf)
