Peek of the Week
May 16, 2016
The
Markets
When is a door not a door?
The
answer, of course, is: When it’s ajar.
Investors
and analysts were trying to find the answer to a different riddle last week:
When are strong retail sales not strong retail sales?
The
answer is: When the retailers are department stores.
Consumers
spent more in April than they have in more than a year. Commerce Department
data showed April’s retail sales improved by 1.3 percent month-to-month and 3.0
percent year-to-year. Yet, several large department stores reported poor first quarter
earnings and weren’t optimistic about the future, according to Barron’s.
The Wall Street Journal pointed out Internet and mobile app purchasing increased
by 2.4 percent in April and was up 10.2 percent for the past 12 months, while purchases
made in department stores fell by 1.7 percent for the last 12 months. The Journal said there is no easy explanation
for lagging department store sales:
“Executives
at traditional large retailers struggled to explain the slump, which for some
companies was their worst since the recession. Some pointed to a decrease in
mall traffic, while others said shoppers were spending more on items their
stores don’t sell such as entertainment, travel, and food.”
The Journal also said strong consumer spending focused some
economists’ attention on the Federal Reserve and the likelihood it will take
actions intended to increase interest rates in mid-June. However, CNBC reported the probability of a rate
increase in June remained low.
Data as of 5/13/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
-0.5%
|
0.1%
|
-2.5%
|
7.8%
|
8.9%
|
4.7%
|
Dow Jones Global ex-U.S.
|
-0.6
|
-2.6
|
-16.1
|
-3.2
|
-2.0
|
-0.9
|
10-year Treasury Note (Yield Only)
|
1.7
|
NA
|
2.3
|
1.9
|
3.2
|
5.2
|
Gold (per ounce)
|
-1.8
|
19.2
|
4.6
|
-4.0
|
-3.4
|
6.3
|
Bloomberg Commodity Index
|
1.3
|
7.5
|
-19.5
|
-13.9
|
-12.0
|
-7.3
|
DJ Equity All REIT Total
Return Index
|
-1.3
|
7.2
|
12.6
|
7.6
|
11.2
|
7.1
|
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.
which country has
the world’s fastest growing economy? We
all know China’s growth is slowing. Last week, China's Vice-Premier Zhang Gaoli
indicated the country is on pace to match its growth target of 6.5 percent to 7.0
percent for 2016. As we’ve mentioned before, the Conference Board believes Chinese government growth numbers are
inflated. It estimates China’s true growth rate at 3.7 percent for 2016, which
is unchanged from 2015. That’s still a lot faster than the 2.0 percent growth
projected for the world’s advanced economies by the World Economic Forum (WEF).
Advanced countries may be lagging, but there are
countries in the world with economies that are growing apace. According to the WEF, countries that will deliver the
strongest economic growth during 2016 include:
·
Myanmar (8.6
percent)
·
Ivory Coast (8.5
percent)
·
Bhutan (8.4
percent)
·
India (7.5
percent)
·
Laos (7.4
percent)
·
Iraq (7.2
percent)
·
Cambodia (7.0
percent)
·
Tanzania (6.9
percent)
·
Bangladesh (6.6
percent)
·
Senegal (6.6
percent)
These projections reflect gross domestic product growth,
which is the total of all goods and services produced in a nation, and offer
little insight to issues such as well-being and quality of life.
Weekly
Focus – Think About It
“I hope it is true that a man can die and yet not
only live in others but give them life, and not only life, but that great
consciousness of life.”
--Jack Kerouac, American novelist
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/dow-industrials-fall-1-2-on-the-week-on-growth-fears-1463197505?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/05-16-16_Barrons-Dow_industrials_Fall_1.2_Percent_on_the_Week_on_Growth_Fears-Footnote_3.pdf)
http://www.wsj.com/articles/u-s-retail-sales-in-april-grow-at-best-pace-in-more-than-a-year-1463142745 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/05-16-16_WSJ-Retail_Sales_Gain_is_Fueled_by_Web-Footnote_4.pdf)
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