Peek of the Week
August 1, 2016
The Markets
Here’s a brain tickler for you:
In July 2016, there were four.
In June 2016, there were 10.
Since 2008, there have been 673!
What are they?
If you guessed central bank rate
cuts, you are on the money. Financial
Times reported:
“In the eight years since the
collapse of Lehman Brothers, the world’s top 50 central banks have, on average,
cut rates once every three trading days…Despite a modest global recovery,
central banks have barely had any time to breathe since the summer of 2008 – carrying
out mass asset purchases and entering into negative rate territory. Britain’s
decision to leave the EU, coupled with political instability across Europe,
still subdued inflation, and concerns over Chinese indebtedness, have spurred
central banks back into action.”
The latest downward adjustment came
last week when the Bank of Japan (BOJ) took its key interest rate into negative
territory, reported CNN Money. Negative
rates are intended to promote bank lending and consumer spending. They also
create a surreal situation in which banks pay customers to borrow and charge
customers to keep money in their accounts.
The stimulus package that
accompanied the BOJ’s rate cut was more subdued than many had expected. The Wall Street Journal said the
less-than-robust stimulus prompted speculation the central bank had “run up
against the limits of monetary policy” and bank leaders wanted to see more
robust fiscal policy introduced by Japan’s government.
The United States has been
pursuing a different course of action. The Federal Reserve has been raising
rates; however, it left rates unchanged last week. More rate cuts may be ahead
elsewhere, though. The Bank of England is expected to cut rates next week.
The Standard & Poor’s 500
Index finished the week slightly lower after the Commerce Department reported growth
of gross domestic product (GDP) – a measure of all goods and services produced
– was weaker than expected during the second quarter. GDP grew at an annualized
rate of 1.2 percent during the period. Economists had expected GDP to grow by
2.5 percent, according to Bloomberg.
In addition, first quarter’s GDP growth was revised downward from 1.1 percent
to 0.8 percent.
Household consumption, which
comprises about 70 percent of GDP, was up 4.2 percent during the second quarter,
according to Bloomberg. However,
those gains were offset by a decline in corporate spending on equipment, structures, and
intellectual property (down 2.2 percent). That was an improvement on first
quarter when corporate spending fell by 3.4 percent. Government spending
declined during the second quarter, as well.
Data as of 7/29/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500
(Domestic Stocks)
|
-0.1%
|
6.3%
|
3.1%
|
8.9%
|
11.0%
|
5.5%
|
Dow Jones Global ex-U.S.
|
1.9
|
2.3
|
-6.7
|
-0.4
|
-0.8
|
0.0
|
10-year Treasury Note (Yield
Only)
|
1.5
|
NA
|
2.3
|
2.6
|
2.8
|
5.0
|
Gold (per ounce)
|
1.6
|
26.3
|
23.1
|
0.3
|
-3.8
|
7.8
|
Bloomberg Commodity Index
|
-0.4
|
7.3
|
-9.4
|
-12.6
|
-12.3
|
-7.2
|
DJ Equity All REIT Total
Return Index
|
0.5
|
18.4
|
23.1
|
13.9
|
13.1
|
7.5
|
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.
the envelope please... Every
year, Kiplinger’s publishes a list of
the best and worst states for retirees. The publication considers the share of
each state’s population that is age 65 or older, as well as average income,
average cost of living, and average healthcare costs for older Americans (relative
to the national average). The economic health of each state and its citizens,
and the taxes imposed on retirees also are considered.
For
2016, the best states for retirees include:
1.
South Dakota
2.
Utah
3.
Georgia
4.
Tennessee
5.
Alabama
6.
South Carolina
7.
Washington
8.
Florida
9.
Arizona
10. Idaho
The
worst states for retirees include:
1.
New York
2.
New Jersey
3.
California
4.
Connecticut
5.
Illinois
6.
Massachusetts
7.
Rhode Island
8.
Montana
9.
Vermont
10. Wisconsin
Interestingly,
taxes weren’t the most important factor in determining the states where
retirees might be happiest. Just four of the most tax-friendly states in
the nation made the list of best places to retire. Utah, Tennessee, Alabama,
South Carolina, and Washington were all in the tax friendly category, while
Idaho fell into the mixed group.
Weekly Focus – Think About It
“If a country is to be corruption free and
become a nation of beautiful minds, I strongly feel there are three key
societal members who can make a difference. They are the father, the mother and
the teacher.”
--A. P. J. Abdul Kalam, Former President of
India
Warm regards from Eagan,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LP Financial Advisor
Securities offered through LPL Financial Inc., Member FINRA/SIPC.
P.S. Please feel free to forward this commentary
to family, friends, or colleagues.
P.S.S. Also,
please remind your friends and family members becoming Medicare eligible that
we offer Medicare insurance and Part D options with NO COST to work with Leif as
their agent
For more information and resources visit our website at www.HagenFN.com
For more information and resources visit our website at www.HagenFN.com
For Medicare supplement and part D information and
resources, please visit MEDICAREforSENIORS.info
Please FOLLOW and “LIKE US” on FACEBOOK.com/HagenFN
Please Read our Blog @ http://HagenFinancialNetwork.blogspot.com
Please Follow our Tweets on Twitter.com/SafeLeif
Check out this: http://www.MedicareForSeniors.info
* 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
“Peek of the Week”, please reply to this email with “Unsubscribe” in the
subject line, or write us at: Hagen Financial Network, Inc. 4640 Nicols Road,
Suite 203; Eagan, MN 55122.
Sources:
http://www.ft.com/fastft/2016/07/28/major-central-banks-have-cut-rates-672-times-since-lehman/ (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-01-16_FinancialTimes-Major_Central_Banks_have_Cut_Rates_672_Times_Since_Lehman-Footnote_1.pdf)
http://www.wsj.com/articles/has-boj-shifted-pressure-onto-japans-government-1469796930 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-01-16_WSJ-Modest_Stimulus_Measure_Signals_Possible_Retreat_at_Bank_of_Japan-Footnote_3.pdf)
http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html (Slide 17)
http://www.kiplinger.com/slideshow/retirement/T006-S001-best-states-for-retirement-2016/index.html (Slides 2-11)
http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html (Slides 7-16)
#financialadvisorEaganMN
#financialplannerEaganMN #wealthmanagementEaganMN
#hagenfinancialnetwork
