PEEK OF THE WEEK
April 17, 2017
Leif Hagen & Donna Roberts
The
Markets
And the survey said...
In late
2016, Natixis Global surveyed 500
institutional decision makers representing corporate pension plans, public
pension plans, sovereign wealth funds, insurance companies, foundations, and
endowments. Survey participants said market volatility, geopolitics, and
interest rates were their top risk concerns for 2017.
So
far, U.S. stock markets haven’t proven to be very volatile, but geopolitics
caused some disruption last week. Barron’s
reported:
“Stocks
fell 1 percent last week in quiet trading, with many market participants out for
religious observances. Worries about the war in Syria, North Korean saber-rattling,
and the coming French elections had investors reining in riskier positions and
heading for safe havens.
Real
estate, utilities, and consumer-staples stocks were the only sectors that rose
last week. Financials – and banks in particular – fell, despite strong earnings
reports from the industry’s big kahunas.”
It was
a tough week for stocks, but investors’ flight to safety caused Treasury bonds
to rally. Reuters reported the interest
rate on 10-year Treasury notes fell 14 basis points. That’s the biggest weekly
decline since January 2016. (There is an inverse relationship between bond
interest rates and bond prices. When interest rates fall, bond prices rise, and
vice-versa.)
Data as of 4/14/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
-1.1%
|
4.0%
|
11.8%
|
8.1%
|
11.2%
|
4.8%
|
|
Dow Jones Global ex-U.S.
|
-0.2
|
6.7
|
8.8
|
-1.2
|
2.9
|
-1.3
|
|
10-year Treasury Note (Yield Only)
|
2.2
|
NA
|
1.8
|
2.6
|
2.0
|
4.8
|
|
Gold (per ounce)
|
1.4
|
10.8
|
3.1
|
-1.1
|
-5.1
|
6.5
|
|
Bloomberg Commodity Index
|
0.5
|
-1.4
|
6.2
|
-14.4
|
-9.4
|
-6.8
|
|
DJ Equity All REIT Total Return Index
|
0.9
|
4.4
|
7.4
|
11.3
|
11.2
|
5.1
|
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.
why do shoelaces come untied? Engineers have solved many knotty problems, but it wasn’t
until recently they unraveled the mystery of shoelaces and why they come undone,
reported The Economist.
If you
don’t wear shoes that lace or spend time with young child who wear lace-ups,
you may not have realized how vexing shoelaces can be. Traditional shoelace
bows are comprised of a reef knot and a slipknot – a combination that has come
undone throughout history. People have explored alternative knots. In fact, there
is an entire website devoted to shoelace knots. It details regular, secure, and
special purpose options.
As it
turns out, the problem with shoelaces is walking. A group of engineers at the
University of California, Berkeley worked out the mechanics of shoelace-bow
destruction using treadmills, cameras, and tiny accelerometers. The Economist reported:
“The
first thing which happens during walking is that the reef itself is loosened by
the inertial forces of the lace ends pulling on it. This occurs as a walker’s
foot moves first forward and then backward as it hits the ground during a
stride. Immediately after that, the shock of impact distorts the reef still
further. The combination of pull and distortion loosens the reef’s grip on the
lace, permitting it to slip…Probably, nothing can be done about this
differential elongation. But it might be possible to use the insights [researchers]
have provided to create laces that restrict the distortion of the reef at a
bow’s center and, thus, slow the whole process down.”
Could this research win an Ig Nobel in 2017? It’s possible.
You may recall from previous commentaries, the
‘Igs’ celebrate improbable research and “…honor achievements that first make
people laugh, and then make them think. The prizes are intended to celebrate
the unusual, honor the imaginative – and spur people's interest in science,
medicine, and technology.”
The 27th First Annual Ig Nobel Prize ceremony will take
place September 14, 2017.
Weekly
Focus – Think About It
“I put a dollar in
one of those change machines. Nothing changed.”
--George
Carlin, Comedian
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/stocks-slip-1-on-week-as-geopolitical-worries-grow-1492229480?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-17-17_Barrons-Stocks_Slip_1_Percent_on_Week_as_Geopolitical_Worries_Grow-Footnote_2.pdf)
http://www.economist.com/news/science-and-technology/21720610-three-californian-engineers-have-found-out-answer-knotty-problem-how (or
go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-17-17_TheEconomist-How_Shoelaces_Come_Undone-Footnote_5.pdf)
