PEEK OF THE WEEK
June 5, 2017
Leif Hagen & Donna Roberts
The
Markets
The bull
market in U.S. stocks is getting really old!
In fact, this bull has been
charging, standing, or sitting for more than eight years. In April, it became
the second longest bull market in American history, according to CNN Money.
There are some good reasons the stock
market in the United States has continued to trend higher. For one, companies
have become more profitable. During the first quarter of 2017, companies in the
Standard & Poor’s 500 Index reported earnings increased by 14 percent,
year-over-year. That was the highest earnings growth rate since 2011, according
to FactSet.
In addition, the economy in the
United States has been chugging along at a steady pace. CIO Charles Lieberman
wrote in Bloomberg View:
“…U.S. economic growth is
continuing at a moderate pace, an economic recovery is finally underway in
Europe, inflation is under control, corporate profits are rising, and there is
some prospect for tax reform and deregulation, even if whatever gets
implemented is less than what is really needed. These conditions imply continued
growth in corporate profits.”
Last week’s employment report
boosted both stock and bond markets. Financial
Times opined the report was weak enough to ease pressure on bond rates and strong
enough to boost share prices higher.
No one can say with certainty
how long a bull market will last. Typically, bull markets are interrupted by
corrections – declines in value of 10 percent or more. Historically, bulls have
turned into bears, eventually. That’s why it’s important to employ investment strategies
that manage risk and preserve capital even when markets are moving higher.
Data as of 6/2/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
1.0%
|
8.9%
|
15.9%
|
8.2%
|
13.8%
|
4.7%
|
|
Dow Jones Global ex-U.S.
|
1.2
|
13.9
|
17.3
|
-0.2
|
7.0
|
-1.1
|
|
10-year Treasury Note (Yield Only)
|
2.2
|
NA
|
1.8
|
2.6
|
1.5
|
4.9
|
|
Gold (per ounce)
|
0.8
|
10.0
|
5.2
|
0.7
|
-4.9
|
6.6
|
|
Bloomberg Commodity Index
|
-2.0
|
-5.9
|
-5.1
|
-14.8
|
-8.4
|
-7.3
|
|
DJ Equity All REIT Total Return Index
|
1.1
|
4.5
|
6.1
|
9.1
|
11.8
|
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.
fresh from the annals of improbable research. Anyone
who enjoys the Ig Nobel Prizes – which spur people's interest in science,
medicine, and technology by making them laugh and then making them think – may
like The Annals of Improbable Research
(AIR). An enthusiastically nerdy science humor magazine, the publication
offers readers the opportunity to read about new and improbable things every
other month.
During its 21-year history, AIR
has covered a variety of topics, including:
·
The Taxonomy
of Barney. “In February 1994, we observed on television an animal which was
there identified as a dinosaur, Barney. Its behavioral characteristics
suggested that it was dissimilar to the diverse dinosaurian faunas that are so
well documented…To test the hypothesis that Barney is a reptile descended from
the true dinosaurs, we went into the field in order to capture and study a
living specimen. This we accomplished with remarkable ease, as Barney was
advertised to be appearing at a local shopping mall.”
·
Horse Calculus. “The idea is that a heart is like a little battery, pushing weak electric
currents in a three-dimensional pattern round the body…During each heartbeat,
the vector (tip of the arrow) draws a loop – the heart loop – whose shape is a powerful
diagnostic of health. Therefore it is useful to measure this loop…His specific
question was: does the theory apply to a real horse or only to an ideal
cylindrical horse…The moral of this is that applications of mathematical knowledge
can be unexpected; you may find yourself taking a surface integral over a
horse.”
·
Which Feels Heavier – A Pound of Lead or a
Pound of Feathers? “Which weighs
more – a pound of lead or a pound of feathers?” The seemingly naive answer to
the familiar riddle is the pound of lead. The correct answer, of course, is
that they weigh the same amount. We investigated whether the naive answer to
the riddle might have a basis in perception. When blindfolded participants
hefted a pound of lead and a pound of feathers each contained in boxes of
identical size, shape, and mass, they reported that the box containing the
pound of lead felt heavier at a level above chance.”
Lurking beneath the unusual is
some potentially useful scientific research.
Weekly Focus – Think About It
“Being a scientist is like being
an explorer. You have this immense curiosity, this stubbornness, this resolute
will that you will go forward no matter what other people say.”
--Sara Seager, Professor of
Planetary Science and Physics
at Massachusetts Institute
of Technology (MIT)
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:
https://www.ft.com/content/1fab9c52-bc35-31d8-a3a3-f428649ca203 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-05-17_FinancialTimes-US_Stocks_Set_New_Records_as_Wall_St_Shrugs_Off_Disappointing_Jobs_Report-Footnote_4.pdf)
http://www.improbable.com/ig/ (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-05-17_Improbable-About_the_Ig-Footnote_6.pdf)
http://www.improbable.com/airchives/paperair/volume1/v1i1/barney.htm (or
go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-05-17_Improbable-The_Taxonomy_of_Barney-Footnote_7.pdf)
http://www.improbable.com/airchives/paperair/volume16/v16i4/Horse_calculus.pdf (or
go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-05-17_Improbable-Horse_Calculus-Footnote_8.pdf)
http://www.improbable.com/airchives/paperair/volume20/v20i5/Feathers-Research-Review-20-5.pdf (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-05-17_Improbable-Feathers_Research_Review-Footnote_9.pdf)
chusetts Institute
of Technology (MIT)
