PEEK OF THE WEEK
February 6, 2017
Leif Hagen & Donna Roberts
The Markets
U.S. stock
markets were unsettled last week.
President Trump's executive
order banning travel from seven predominantly Muslim countries to the United
States for 90 days, in tandem with some disappointing earnings reports,
inspired turmoil and uncertainty that helped push U.S. stock markets lower
early in the week. The Dow Jones Industrial Average dropped below 20,000.
Mid-week, markets remained
sanguine after the Federal Reserve left interest rates unchanged. An economist
cited by Barron’s said:
“[The Federal Reserve] left open
the door to hike rates further should the trend in inflation accelerate while
also maintaining the option to hold rates steady for an extended period. I
expect the minutes to be released in a few weeks will show a more wide ranging
debate than that indicated by the policy statement, but the clear lack of
visibility on key trade, tax, spending, and regulatory initiatives argued for a
well-scrubbed statement.”
Late in the week, markets
rallied when the Bureau of Labor Statistics delivered a reasonably strong jobs
report. The Boston Globe wrote,
“…employers added a healthy 227,000 workers to their payrolls in January. But,
despite a surge of local minimum-wage increases in states across the country,
wage growth was meager.”
Financial shares gained on
Friday. The Washington Post reported
market optimism returned after The Wall
Street Journal published an interview with Gary Cohn, White House Economic
Council Director. Cohn indicated President Trump planned to sign executive
orders preparing the way to dismantle Dodd-Frank reforms and limit other
regulations affecting the financial industry.
The Dow
finished the week just above 20,000.
Data as of 2/3/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
0.1%
|
2.6%
|
20.1%
|
9.7%
|
11.3%
|
4.7%
|
|
Dow Jones Global ex-U.S.
|
0.3
|
4.3
|
15.3
|
-0.1
|
1.8
|
-1.0
|
|
10-year Treasury Note (Yield
Only)
|
2.5
|
NA
|
1.9
|
2.6
|
2.0
|
4.8
|
|
Gold (per ounce)
|
2.6
|
4.8
|
7.4
|
-1.3
|
-6.9
|
6.5
|
|
Bloomberg Commodity Index
|
-0.1
|
0.5
|
15.3
|
-11.4
|
-9.6
|
-6.1
|
|
DJ Equity All REIT Total
Return Index
|
0.8
|
0.7
|
13.4
|
12.5
|
10.2
|
4.2
|
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.
does college open doors? A new study
examined how college affects Americans’ social mobility by cross-referencing
data from the Department of Education (from 1999-2013) with 30 million tax
returns. The researchers looked at the earnings of graduates from various
colleges and how graduates’ earnings varied relative to parental income. The Economist described some of the
findings:
“…some colleges do a better job of
boosting poor students up the income ladder than others. Previously, the best
data available showed only average earnings by college. For the first time, the
entire earnings distribution of a college’s graduates – and how that relates to
parental income – is now known.
These data show that graduates of
elite universities with single-digit admissions rates and billion-dollar
endowments are still the most likely to join the top 1 percent (though having
wealthy parents improves the odds). And despite recent efforts to change, their
student bodies are still overwhelmingly wealthy…
…legacy admissions, which give
preferential treatment to family members of alumni, exacerbate the imbalance.
Of Harvard’s most recently admitted class, 27 percent of students had a
relative who also attended. There’s evidence that this system favors the
already wealthy. MIT and the California Institute of Technology, two elite
schools with no legacy preferences, have much fewer students who hail from the
ranks of the super-rich.”
The top colleges by mobility
rate (students moving from the bottom to the top 20 percent) included: Cal
State University-Los Angeles, Pace University-New York, SUNY-Stony Brook,
Technical Career Institutes, University of Texas-Pan American, CUNY System,
Glendale Community College, South Texas College, Cal State Polytechnic-Pomona,
and University of Texas-El Paso.
The top colleges by upper-tail
mobility rate (students moving from the bottom 20 percent to the top 1 percent)
were: University of California-Berkeley, Columbia University, MIT, Stanford
University, Swarthmore College, Johns Hopkins University, New York University,
University of Pennsylvania, Cornell University, and University of Chicago.
Weekly Focus – Think About It
“Oh give me a home where the buffalo roam,
Where the deer and the antelope play,
Where seldom is heard a discouraging word,
And the skies are not cloudy all day.”
--Lyrics to Home on the
Range
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-holds-on-to-20-000by-the-skin-of-its-teeth-1486188910?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/02-06-17_Barrons-Dow_Holds_on_to_20000-By_the_Skin_of_Its_Teeth-Footnote_2.pdf)
http://www.economist.com/news/united-states/21715735-new-data-show-joining-1-remains-unsettlingly-hereditary-skipping-class (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/02-06-17_TheEconomist-Skipping_Class-Footnote_7.pdf)
