PEEK OF THE WEEK
August 28, 2017
Leif Hagen & Donna Roberts
The Markets
Hope floats.
Optimism about possible
pro-growth economic policies, including tax reform and deregulation, helped
U.S. stock indices finish higher last week, reported Barron’s. It wasn’t all smooth sailing, though. Stocks bobbed up
and down as investors’ optimism was weighted by concerns about a possible
debt-ceiling battle and government shutdown.
CNN offered some insight to the historic economic impact of
government shutdowns on productivity:
“The last time the government was
forced to close up shop – for 16 days in late 2013 – it cost taxpayers $2
billion in lost productivity, according to the Office of Management and Budget.
Two earlier ones – in late 1995 and early 1996 – cost the country $1.4 billion.”
For investors, it’s important to
distinguish between a shutdown’s potential effect on the U.S. economy and its
possible impact on U.S. stock markets. A source cited by The New York Times reported:
“…during all 18 government
shutdowns, starting in 1976…the Standard & Poor’s 500-stock index averaged
just a 0.6 percent loss over the course of those closures. Early on in shutdown
history, investors reacted very negatively. Closures in 1976 and 1977 coincided
with 3 percent declines in the [S&P 500].
As investors grew more accustomed
to shutdowns, they seemed to become more blasé about them. During the mid-1990s
and the 2013 closure, for instance, stocks actually rose. They gained 3.1
percent during the 2013 stoppage.”
Bond investors were relatively
calm last week, according to Financial
Times. Although, there were signs of “debt ceiling jitters.” Yields on U.S.
Treasuries that mature in October (when a shutdown may occur) rose on concerns
investors might not be repaid in a timely way.
No matter what happens in
September and October, keep your eyes on the horizon and your long-term goals.
Data as of 8/25/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
0.7%
|
9.1%
|
12.5%
|
6.9%
|
11.6%
|
5.2%
|
|
Dow Jones Global ex-U.S.
|
1.0
|
16.6
|
14.7
|
0.4
|
5.1
|
-0.4
|
|
10-year Treasury Note (Yield
Only)
|
2.2
|
NA
|
1.6
|
2.4
|
1.7
|
4.6
|
|
Gold (per ounce)
|
-0.8
|
10.9
|
-2.7
|
0.0
|
-5.1
|
6.8
|
|
Bloomberg Commodity Index
|
0.1
|
-4.8
|
-2.1
|
-12.8
|
-10.5
|
-6.6
|
|
DJ Equity All REIT Total
Return Index
|
2.1
|
6.3
|
1.3
|
8.5
|
9.9
|
6.8
|
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.
millennials are killing it! A recent
article in Buzzfeed listed headlines
announcing the various things Millennials have “killed” or are “killing.” The
list included Big Oil, the NFL, the workday, the cereal industry, and bar soap.
Here’s another industry that is
being undermined by millennials’ preferences: cable and satellite television.
Millennials are leading a viewing revolution. They are unwilling to ante up for
cable and satellite subscriptions, preferring less expensive Internet and
streaming services that provide content via the World Wide Web.
A 2017 survey from Videology found more than half of
millennial men (ages 18 to 34) have stopped paying for cable, and Forbes reported:
“…on average, the 30-and-under
crowd's primary means of consuming content is through mobile devices,
streaming, and online. That's in sharp contrast to the over-30 crowd who still
rely on television for an average of more than 80 percent of their film and TV
show viewing.”
The waning popularity of cable
and satellite TV appears to have a lot to do with cost. The typical household paid
more than $1,200 a year, on average, for cable and satellite television in
2016, according to Nerdwallet – and
the cost increased in 2017. Consumer
Reports wrote, “Most pay TV companies have announced modest price hikes,
but there are also new hidden fees.”
Budget-minded millennials may be
having an influence on older generations whose preferences appear to be
changing, too. GfK, a market research
company, reported:
“New findings…show that U.S. TV
households are embracing alternatives to cable and satellite reception. Levels
of broadcast-only reception [a.k.a. antenna reception] and Internet-only video
subscriptions have both risen over the past year, with fully one-quarter (25
percent) of all U.S. TV households now going without cable and satellite reception.”
So, what kind of savings can be
generated when you cut the cable? It all depends on what you currently pay, but
it may be worth crunching the numbers.
Weekly
Focus – Think About It
“I find television very educating. Every time somebody
turns on the set, I go into the other room and read a book.”
--Groucho Marx, American comedian
Best Regards,
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/stocks-rally-on-renewed-talk-of-tax-reform-1503725643?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-28-17_Barrons-Stocks_Rally_on_Renewed_Talk_of_Tax_Reform-Footnote_1.pdf)
https://www.ft.com/content/a5509830-e4ad-3c7f-a821-d92c14374c21 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-28-17_FinancialTimes-Debt-ceiling_Debate_Starts_to_Stir_Parts_of_US_Treasuries_Market-Footnote_4.pdf)
