PEEK OF THE WEEK
July 18, 2016
The Markets
“Start
your engines,” was not in the Department of Labor (DOL)’s June Employment
Report Summary, but it may as well have been. A positive jobs report revved
investor optimism and sent U.S. stock markets sprinting higher last week.
Job
growth was strong in June with 287,000 new jobs created. That helped soothe
worries raised by a less than stellar May jobs report. The Wall Street Journal wrote:
“A
powerful rebound in hiring last month eased fears about an economic downturn as
the U.S. expansion enters its eighth year, putting the nation on solid footing
to absorb global shocks and market turbulence.”
Investors
appeared to agree the U.S. economic growth would continue apace. The American Association of Individual Investors
(AAII)’s Investor Sentiment Survey
reported bullish sentiment – the expectation stock prices will rise over the
next six months – increased by 5.8 percentage points last week to 36.9 percent.
That’s just the second time since November 2015 bullishness has stayed above 30
percent for two weeks in a row.
Money
managers didn’t sit in the stands. The National
Association of Active Investment Managers reported active managers
increased their stock market exposure to 97 percent last week, which is the
highest since the group began calculating the measure, according to Bloomberg.
Investors’
enthusiasm was fortified by positive earnings reports and helped some markets
reach new highs. The Dow Jones Industrial Average finished Friday at a record
high, according to Reuters, and Bloomberg said, “...the S&P 500
Index closed at record highs on four consecutive days, something that hadn’t
happened since November 2014.”
The
coup in Turkey on Friday threw a wrench into the works. Demand for safe haven
assets increased, according to Bloomberg.
It wouldn’t be a surprise if markets pulled back to assess.
Data as of 7/15/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard
& Poor's 500 (Domestic Stocks)
|
1.5%
|
5.8%
|
2.6%
|
8.7%
|
10.4%
|
5.8%
|
Dow
Jones Global ex-U.S.
|
3.7
|
0.4
|
-9.5
|
-0.9
|
-1.0
|
0.4
|
10-year
Treasury Note (Yield Only)
|
1.6
|
NA
|
2.4
|
2.7
|
2.9
|
5.1
|
Gold
(per ounce)
|
-2.0
|
24.9
|
15.6
|
1.1
|
-3.5
|
7.4
|
Bloomberg Commodity Index
|
0.4
|
10.4
|
-12.0
|
-12.3
|
-12.0
|
-6.8
|
DJ Equity All REIT Total
Return Index
|
0.4
|
15.9
|
221.4
|
12.6
|
12.5
|
7.7
|
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.
look
into the crystal ball… Sure,
the world has changed during the last decade or two. We’ve gained about 1.6
billion people. (There are now 7.2 billion of us, globally.) There is an app
for almost everything. (Just try to ‘catch ‘em all!’) We even job hunt in
cyberspace. (Make sure you customize your communications.)
Here are a few other changes that
may be coming our way soon:
- Saltwater
crops.
One-fifth of the world’s irrigated farmland has been swamped by seawater,
and rising sea levels mean more acreage may be at risk. Phys.org reports scientists around
the world have been studying how to grow salt-tolerant crops, including
potatoes, strawberries, carrots, onions, and lettuce.
- Custom-engineered
bones. “For
the first time, pieces of living bone have been grown from the cells of…miniature
pigs – and sculpted to replace…a pig's lower jaw, one of the strongest and
most complex jaws in the face,” according to LiveScience.com.
- Smart
refrigerators.
Someday soon, you may replace your old refrigerator with a smart fridge.
The latest models have cameras that connect to your smart phone via Wi-Fi,
so you can see what’s inside while you’re shopping at the grocery store.
- Food-sharing
apps. Don’t
have time to cook? Log in to a food-sharing app to “connect with people in
the same area who have leftover food to give away, allowing surplus to be
shared and not wasted.”
- Dragon
silk armor.
Genetically modified silkworms – they now share DNA with spiders – are
spinning one of the toughest fibers ever made. If it performs well in
ballistic tests, the U.S. Army may soon be wearing silk.
Our parents and
grandparents saw the arrival of countless innovations – the telegraph, radio,
television, automobiles, space travel, and much more. We’re likely to witness
some pretty amazing things, too!
Weekly Focus – Think About It
“It is important for
all of us to appreciate where we come from and how that history has really
shaped us in ways that we might not understand.”
--Sonia Sotomayor,
Supreme Court Justice
Warm regards from Eagan,
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.wsj.com/articles/u-s-added-287-000-jobs-in-june-1467981259 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-18-16_WSJ-US_Job_Growth_Rebound_Calms_Fears_of_Economic_Swoon-Footnote_1.pdf)
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