Peek of
the Week
February 22, 2016
And the economic data says…
The United States economy is doing pretty well. So
well that a March rate hike by the Federal Reserve is not entirely out of the
question. Barron’s described the
situation like this:
“Squawking pessimism can't drown out what is a very
respectable start to 2016. Economic data so far this year, apart from
predictions of deflation and negative interest rates, could justify what was
scheduled to be, but what soon seemed impossible, a rate hike at the March
FOMC. Yes, global factors are a risk and are hurting the factory sector but
service prices are definitely on the climb and vehicle prices and vehicle
production, reflecting strength in domestic demand, are back up. Ignore the
cacophony of doubt and look at the economic data for yourself!”
U.S. economic data was generally positive last week,
but that wasn’t the primary driver behind the rally in U.S. stock markets,
according to Reuters. Nope, that had
more to do with oil prices. Despite serious political differences, Iran and
Saudi Arabia appeared to reach an accord on oil production last week, when Iran
endorsed a plan by Saudi Arabia to stabilize global oil prices, according to The Guardian. The agreement pushed oil
prices higher mid-week.
However, late in the week, news that oil stockpiles in
the U.S. were at record levels reignited worries about oversupply and oil
prices fell at week’s end. U.S. stock markets followed, giving back some of the
week’s gains on Friday, but all of the major indices finished more than 2 percent
higher for the week.
Economic data may dominate the news next week. We’ll
get more information on housing, durable goods orders, jobless claims for
February, and a revised estimate for fourth quarter’s gross domestic product
growth. Barron’s suggested a strong
employment report in tandem with rising prices could influence the Fed’s
interest rate decision.
Data as of 2/19/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard &
Poor's 500 (Domestic Stocks)
|
2.8%
|
-6.2%
|
-8.6%
|
7.8%
|
7.8%
|
4.1%
|
Dow Jones Global
ex-U.S.
|
4.4
|
-8.4
|
-17.6
|
-4.3
|
-3.2
|
-0.7
|
10-year Treasury
Note (Yield Only)
|
1.8
|
NA
|
2.0
|
2.0
|
3.5
|
4.6
|
Gold (per ounce)
|
-0.7
|
15.9
|
1.8
|
-8.5
|
-2.6
|
8.3
|
Bloomberg Commodity Index
|
-0.4
|
-4.4
|
-27.2
|
-18.6
|
-14.2
|
-7.6
|
DJ Equity All REIT Total Return Index
|
4.1
|
-5.8
|
-6.2
|
6.4
|
9.2
|
5.8
|
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.
wondering what
the next decade may bring? America is
renowned for innovation – originating ideas that change the ways in which
people live and work. From the cotton gin to the assembly line, the
transcontinental railroad to the automobile, the telephone to the Internet,
ideas and inventions have spurred America’s economic growth during the past two
centuries. Here are a few inventions that are on the horizon:
·
The Superman memory crystal: Imagine, a tiny piece of glass etched by a laser that
has the capacity to save an enormous amount of data for more than 13 billion
years, according to LiveScience.com. One
tiny disc currently holds the Magna Carta, Universal Declaration of Human
Rights, and King James Bible.
·
A transparent antipeep piezoelectric nanogenerator
(TAPN): It may have a tongue twister
of a name right now, but the TAPN could become as familiar as your phone
charger in the future. All you’ll have to do is place a transparent film on the
touchscreen of a smartphone or another device, and then every tap on the screen
will generate electricity. Which begs the question: Could texting teenagers
power the world?
·
A braille printer: A 12-year-old used Legos to build an inexpensive printer for people
who are blind or suffering from macular degeneration or other conditions that
affect eyesight. It used a thumbtack to punch braille dots into paper. Newer
prototypes don’t rely on thumbtacks, and are expected to translate words from a
computer screen into braille very quickly.
·
A fry pan that teaches cooking: Cooking will not become a lost art if a couple of
hungry and cooking-challenged college students are successful. They’ve
developed a smart frying pan. The pan transmits temperature data to the cook
using a smartphone app that also lets the cook know when it’s time for the next
step in a recipe.
The human brain is an engine for innovation, and innovation
is a driver of economic growth. Let’s hope the outlook is good for brainstorms
in the United States and across the globe.
Weekly Focus –
Think About It
“Software innovation, like
almost every other kind of innovation, requires the ability to collaborate and
share ideas with other people, and to sit down and talk with customers and get
their feedback and understand their needs.”
--Bill Gates, Founder of Microsoft
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/mdc/public/page/9_3063-economicCalendar.html (Click on U.S.
& Intl Recaps and select "The
year of the chicken")
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html (Click on U.S.
& Intl Recaps and select "A
better week for equities")
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html (2016 Economic Calendar for the
week of February 22, 2016)
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