PEEK OF THE WEEK
March 7, 2016
March 7, 2016
The Markets
When Mark Twain’s death was
reported in the United States, he was alive and well in London. He responded to
news accounts with a note saying, “The report of my death was an exaggeration.”
Last week’s jobs data suggest
the same is true of reports that a recession is imminent in the United States. Barron’s explained:
“Thank
goodness the mid-February fears of recession that brought markets to their
knees – and the 10-year Treasury yield to a low of 1.53 percent – were
overblown. Friday’s nonfarm payrolls report was the latest confirmation. It
showed that 242,000 jobs were created last month, far more than expected and up
from the previous month’s reading, which was itself revised higher.”
The employment data weren’t
all positive, though. Average hourly earnings declined when it was expected to
increase and the number of hours worked was lower, on average, than it has been
for two years.
Regardless, The Wall Street Journal said employment,
consumer, and business spending reports helped calm investors’ fear the U.S.
economy was losing momentum. Some investors sold bonds, which helped push the
yield on 10-year Treasury notes higher.
Investors also were
encouraged by last week’s oil price rally, according to CNBC. A better demand outlook, coupled with cuts in supply, boosted
oil prices by 9.5 percent in one week.
U.S. stock market performance
reflected investors’ renewed optimism. USA
Today said, “Stocks have rebounded from their worst start to a year ever,
with the benchmark S&P 500 trimming its year-to-date loss to 2.15 percent after
being down by more than 10 percent on February 11.” At the end of last
week, the Standard & Poor’s 500 Index was about 6 percent below its record
high.
Data as of 3/4/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard &
Poor's 500 (Domestic Stocks)
|
2.7%
|
-2.2%
|
-5.1%
|
9.5%
|
8.7%
|
4.6%
|
Dow Jones Global
ex-U.S.
|
5.0
|
-3.6
|
-13.2
|
-2.1
|
-2.5
|
-0.3
|
10-year Treasury
Note (Yield Only)
|
1.9
|
NA
|
2.1
|
1.9
|
3.5
|
4.7
|
Gold (per ounce)
|
4.2
|
20.3
|
6.5
|
-6.7
|
-2.2
|
8.5
|
Bloomberg Commodity Index
|
3.9
|
-0.2
|
-23.2
|
-16.8
|
-14.3
|
-7.0
|
DJ Equity All REIT Total Return Index
|
3.9
|
0.0
|
0.6
|
8.4
|
10.7
|
6.2
|
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.
are you leaving
the same amount to all of your beneficiaries?
One-third of all parents with wills have divided their
estates unequally among their children, according to the National Bureau of Economic Research (NBER). The study found
bequests in complex families – families with stepchildren or estranged children
– are more likely to be unequal. The
Squared Away Blog reported:
“…parents with stepchildren are considerably less
likely to include all of their children than are parents who have only
biological offspring. This is more true for women with stepchildren than for
men with stepchildren. Divorced and widowed parents are even less likely to
divide their assets evenly if they have stepchildren.”
The blog reported there were some mitigating factors.
Wealthier parents were more likely to include stepchildren and children with
whom they had little or no contact during their lifetimes than less wealthy
parents. However, parents who suffered from poor health were less likely to
divide their estates equally. Bequests sometimes were used as an incentive to
provide long-term care.
Since children may interpret unequal inheritance as an
expression of unequal love, why do parents play favorites? Researchers at Ohio
State University delved into the question in 2003 and reported altruism
(equalizing income differences among children), exchange (bequests in return
for services), and/or evolution (bequests to biological children rather than
adopted or stepchildren) played a role when distribution of assets was uneven.
Weekly Focus –
Think About It
“The philosophy of the
school room in one generation will be the philosophy of government in the
next.”
--Abraham
Lincoln, Former U.S. President
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/3-strategies-for-coping-with-volatile-rates-1457157564?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-07-16_Barrons-3_Strategies_for_Coping_with_Volatile_Rates-Footnote_2.pdf)
http://blogs.barrons.com/incomeinvesting/2016/03/04/payroll-growth-jumps-in-february-unemployment-flat-as-wages-slip/ (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-07-16_Barrons-Payroll_Growth_Jumps_in_February-Footnote_3.pdf)
http://www.wsj.com/articles/u-s-government-bonds-sell-off-after-jobs-data-1457099834 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-07-16_WSJ-US_Government_Bonds_Post_Biggest_Weekly_Selloff_Since_November-Footnote_4.pdf)
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