PEEK OF THE WEEK
APRIL 10, 2017
Leif Hagen & Donna Roberts
The
Markets
U.S. stock
markets are sending mixed signals.
If you look at the performance
of the CBOE Volatility Index (a.k.a. the VIX or fear gauge), which is a measure
of market expectations for volatility in the near future, it appears all is
well and investors expect no unexpected events. Barron’s explained:
“…which brings us back to a central
fact: the absence of volatility. The first quarter was historic for the CBOE
Volatility Index...It ranged from 10.6 to 13.1, and its average level was
11.69, the lowest in an initial quarter since the VIX was born in 1990 and the
second-lowest quarterly average since the 11.3 of 2006’s final three months...”
The VIX remained stubbornly low
last week, too, despite weaker than expected employment news, wage news, and
generally flat economic data.
If you turn your eyes to the
number of companies whose shares have reached new highs, you might form a
different opinion about the steadiness of stock markets. Barron’s wrote:
“…the squadron of stocks pushing
52-week highs at the New York Stock Exchange has shrunk from 338 on March 1 to
72 late last week…But, if the planet really is enjoying a synchronized economic
recovery, why are we lunging at these stocks as if they were the only game in
town?”
It’s difficult to know how to
factor in last week’s air strikes against Syria, which registered as a tiny
blip on the U.S. stock market radar. Some analysts say that’s as it should be.
The real drivers of market performance in 2017 will be tax reform and global
monetary policy. Others are concerned involvement in Syria could lead to a
reshuffling of political priorities and delay progress on domestic legislation.
In times
like these, diversification is critical.
Data as of 4/7/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard
& Poor's 500 (Domestic Stocks)
|
-0.3%
|
5.2%
|
15.4%
|
8.5%
|
11.3%
|
5.0%
|
|
Dow
Jones Global ex-U.S.
|
-0.4
|
7.0
|
13.2
|
-1.4
|
2.8
|
-1.2
|
|
10-year
Treasury Note (Yield Only)
|
2.4
|
NA
|
1.7
|
2.7
|
2.0
|
4.7
|
|
Gold
(per ounce)
|
1.7
|
9.3
|
2.0
|
-0.8
|
-5.1
|
6.5
|
|
Bloomberg
Commodity Index
|
0.6
|
-1.9
|
10.8
|
-13.9
|
-9.5
|
-6.7
|
|
DJ
Equity All REIT Total Return Index
|
0.9
|
3.5
|
7.3
|
10.7
|
11.0
|
4.9
|
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.
pulling ink out of the air. Air pollution
is one of the biggest environmental and human health threats in the world,
according to a 2016 World Health
Organization report:
“To date, air pollution – both
ambient (outdoor) and household (indoor) – is the biggest environmental risk to
health, carrying responsibility for about one in every nine deaths annually.
Ambient (outdoor) air pollution alone kills around 3 million people each
year…Air pollution continues to rise at an alarming rate and affects economies
and people’s quality of life; it is a public health emergency.”
Engineer Anirudh Sharma was
familiar with the problem. The MIT Media Lab student was walking down a street
in Mumbai, reported MSN.com, when he
noticed that diesel exhaust from passing buses and cars was staining his
clothes black.
The experience sparked an idea:
Was it possible to recycle air pollution and use it to make something useful?
Like ink?
During the past few years,
Sharma has developed technology to create the world’s first line of art
supplies derived from air pollution. He and his team have built an exhaust
filter that captures carbon soot as it is emitted from cars, generators, and
ferries. Once pollution has been gathered, impurities are removed. The
remaining soot is ground into pigment and mixed with vegetable oil to create
inks, markers, and paints.
One artist commented, “I don’t
know if it’s the pollution, but the quality of the ink is really special…It’s
pitch black, really thick and dries incredibly quickly.”
Last month, the first Clean Air
Gallery opened in London. It features work by artists from London, Glasgow,
Leeds, Southampton, and Nottingham – some of the most polluted cities in the United
Kingdom – using Sharma’s ink. Other exhibitions are expected to open in Berlin,
Singapore, and New York.
Weekly
Focus – Think About It
“A mind which really lays hold
of a subject is not easily detached from it.”
--Ida Tarbell, Investigative
journalism pioneer
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.
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Sources:
http://www.barrons.com/articles/low-vix-may-mask-stock-risks-1491625249?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-10-17_Barrons-Low_VIX_may_Mask_Stock_Risks-Footnote_2.pdf)
(click
on U.S. & Intl Recaps and select "The job madness of March") (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-10-17_Barrons-The_Job_Madness_of_March-Footnote_3.pdf)
http://www.barrons.com/articles/are-stocks-finally-topping-out-1491627050?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-10-17_Barrons-Are_Stocks_Finally_Topping_Out-Footnote_4.pdf)
http://www.barrons.com/articles/do-airstrikes-signal-new-priorities-for-trump-1491627084?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-10-17_Barrons-Do_Airstrikes_Signal_New_Priorities_for_Trump-Footnote_5.pdf)
http://apps.who.int/iris/bitstream/10665/250141/1/9789241511353-eng.pdf?ua=1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-10-17_WorldHealthOrganization-Report-Ambient_Air_Pollution-Footnote_6.pdf)
