PEEK OF THE WEEK
July 24, 2017
Leif Hagen & Donna Roberts
The Markets
Do we have
central banks to thank?
Low interest rates,
accommodative monetary policy, and improving economic growth have helped stock
markets around the world reach record highs, reports Barron’s:
“…a look around the globe shows the
surge of the U.S. market to new peaks to be anything but unique. Major
[markets] in Europe and Asia also have been setting records. Even in South
Korea, the Kospi closed at a new peak and is up 25 percent from its 52-week low
last year, as the global technology rally has proved to be more powerful than
the threat of a nuclear-missile launch from North Korea. Last week also saw a
record close in the S&P BSE Sensex in India. Japan’s Nikkei is up 25
percent from last August and near a 52-week high (albeit still down 48 percent
from its 1989 bubble peak). The Shanghai Composite is a relative laggard, with
a 9.6 percent gain from its August lows, bolstered by a 3.7 percent jump over the
past five weeks.”
Eventually, central banks are
expected to tighten monetary policy by raising interest rates and reducing the
size of their balance sheets and that could affect markets. The U.S. Federal
Reserve released its Policy Normalization
Principles and Plans back in 2014. Last month, Chair Janet Yellen indicated
the Fed currently intends to begin normalizing policy during 2017.
U.S.
monetary policy isn’t the only phenomenon investors may want to keep an eye on.
Fiscal policy (the steps a government
takes to influence its country’s economy) deserves some attention, too. The
United States will, once again, hit its legal spending limit (the debt ceiling)
this fall. U.S. News reported, “Were
the United States to hit its borrowing limit – and thus have to start missing
payments and stiffing creditors – there's no telling the exact consequences,
but they wouldn't be good.”
The bond market does not appear
to be confident fiscal policy will proceed smoothly. Barron’s reported, “Yields on T-bills that mature in mid-to-late
October jumped relative to surrounding maturities, a sign that the money market
saw a risk – however slight – of not getting paid on time.”
Data as of 7/21/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
0.5%
|
10.4%
|
14.2%
|
7.8%
|
12.9%
|
4.8%
|
|
Dow Jones Global ex-U.S.
|
0.8
|
16.0
|
17.2
|
0.1
|
6.5
|
-1.2
|
|
10-year Treasury Note (Yield
Only)
|
2.2
|
NA
|
1.6
|
2.5
|
1.4
|
5.0
|
|
Gold (per ounce)
|
1.5
|
7.7
|
-5.5
|
-1.6
|
-4.5
|
6.2
|
|
Bloomberg Commodity Index
|
0.4
|
-5.2
|
-2.3
|
-13.8
|
-10.4
|
-6.9
|
|
DJ Equity All REIT Total
Return Index
|
0.7
|
5.9
|
-1.4
|
8.7
|
10.1
|
6.4
|
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.
So, here’s another college conundrum: College is a
hot topic. College is a hot topic. In recent years, pundits have
debated whether students should attend college or skip it and start their own
companies. The Thiel Fellowship, founded by tech entrepreneur Peter Thiel,
offers students $100,000 to do just that.
For students who choose college,
much has been made about which degrees will pay off. Some argue liberal arts
degrees lack value, and technical instruction is the real ticket to success.
Meanwhile, technology company leaders have reported liberal arts are essential
because “they train students to thrive in subjectivity and ambiguity, a
necessary skill in the tech world where few things are black and white.”
College is also known for
changing the way students think. A new survey indicates it may alter their
culinary perspectives. The Economist commissioned
a poll to see if residence, income, education, or political affiliation has an
effect on food preferences and, guess what? College and post graduate work may
expand students’ gustatory preferences and change their eating habits! No, they
don’t develop an unhealthy obsession with ramen noodles, boxed mac and cheese,
or free food (usually). The survey found:
·
People with post graduate degrees dine out more
frequently – often weekly – than people with high school diplomas.
·
Post grads also tend to eat Indian foods, like
curries, more often than people with high school diplomas.
·
College grads are more likely than non-college
grads to have eaten sushi within the past year.
·
College grads are also more likely than
non-college grads to know what prosciutto is and to have eaten it recently.
As it turns out, the great
equalizer was Mexican food. A majority of Americans have eaten Mexican food
during the past year, regardless of educational attainment.
Weekly
Focus – Think About It
“Peanut butter and jelly in the same jar.
I don't understand that. I mean, I'm lazy but I'd like to meet the guy that
needs that. This guy must be thinking, "I could go for a sandwich, but I'm
not gonna open TWO jars. I can't be opening and closing all kinds of jars and
cleaning WHO KNOWS how many knives.”
--Brian Regan, American comedian
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.barrons.com/articles/t-bill-yields-edge-up-on-debt-ceiling-anxieties-1500703751 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-24-17_Barrons-T-Bill_Yields_Edge_Up_on_Debt-Ceiling_Anxieties-Footnote_1.pdf)
https://www.economist.com/blogs/graphicdetail/2017/07/daily-chart-12 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/07-24-17_TheEconomist-In_America_You_are_What_You_Eat-Footnote_8.pdf)
