PEEK OF THE WEEK
November 13, 2017
Leif Hagen & Donna Roberts
The Markets
Selling it overseas.
Most
of the companies in the Standard & Poor’s 500 (S&P 500) Index have reported
third quarter earnings per share (EPS), which is the profit earned per share of
stock outstanding during the period. Many have done quite well.
With more
than 90 percent of companies reporting, the total EPS growth rate for the S&P
500 has exceeded expectations, reported FactSet.
In aggregate, the growth rate accelerated from 3.1 percent on September 30 to
6.1 percent last week.
It’s
interesting to note companies that sell more products and services outside the
United States experienced significant increases in EPS when compared to companies
that sell more at home. S&P 500 companies with:
·
More than one-half of sales
in the United States had an aggregate growth rate of 2.3 percent.
·
Less than one-half of
sales in the United States had an aggregate growth rate of 13.4 percent.
The
disparity owed much to the weaker U.S. dollar and faster economic growth in other
countries, including emerging markets.
Investors
weren’t all that appreciative of strong corporate performance. They rewarded
positive EPS surprises less than average and penalized negative EPS surprises
more than average. On November 10, FactSet
explained:
“...it
may be due to the high valuation of the index relative to recent averages. As
of today, the forward 12-month P/E [price-to-earnings] ratio for the S&P
500 is 18.0… Prior to the month of October, the forward 12-month P/E had not
been equal to (or above) 18.0 since 2002. Thus, despite the number and
magnitude of positive earnings surprises in recent quarters, the market may be
reluctant to push valuations even higher in aggregate.”
Last week, major U.S. stock indices ended their multi-week winning
streaks and finished lower.
Data as of 11/10/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard
& Poor's 500 (Domestic Stocks)
|
-0.2%
|
15.3%
|
19.1%
|
8.2%
|
13.4%
|
6.0%
|
Dow
Jones Global ex-U.S.
|
-0.3
|
21.3
|
23.0
|
4.0
|
5.7
|
-0.5
|
10-year
Treasury Note (Yield Only)
|
2.4
|
NA
|
2.1
|
2.4
|
1.6
|
4.2
|
Gold
(per ounce)
|
1.4
|
10.8
|
1.3
|
3.4
|
-5.8
|
4.8
|
Bloomberg
Commodity Index
|
0.5
|
-0.3
|
4.1
|
-9.2
|
-9.1
|
-7.1
|
DJ
Equity All REIT Total Return Index
|
2.7
|
9.9
|
17.9
|
8.2
|
11.1
|
7.3
|
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.
The Winter holidays are almost here. It’s that time of year when people search and search for just-the-right
gifts at just-the-right-prices for friends and loved ones. The National Retail Federation expects holiday sales to rise by 3.6 percent to
4.0 percent this year and total about $680 billion. The average consumer
expects to spend about $970 on the holidays.
Here are a few gift ideas for the hard-to-buy-for individuals on your list:
·
For coffee lovers. It’s an experience shared by coffee
drinkers everywhere. You pour a cup, doctor it up, and before you can take a
sip, you are called away. By the time you return, the coffee is cold. A ceramic
mug with a microprocessor-controlled heating system can solve the problem.
·
For the outdoorsy. Anyone who spends time in the sun knows
the importance of sunscreen. The mystery is when to reapply it. The outdoorsy
folks in your family may appreciate a UV patch. It’s a wearable decal that
changes color when it’s time to reapply sunscreen.
·
For the indoorsy. Series bingers and show streamers will
love ‘wallpaper’ television. It’s a new kind of TV that viewers ‘peel and
stick’ to their walls using magnetic mats.
·
For the fashion-conscious
environmentalist. Soon,
clothing may be made of synthetic spider silk and bio-manufactured leather.
It’s unlikely they’ll be available this winter, but you could give tickets to
the Museum of Modern Art in New York City. Clothing made of these fabrics is on
display through January 2018.
·
For the insomniac. Know someone who has trouble sleeping? A
white noise machine or an air purifier with a fan can provide constant,
soothing sound that may help lull them to sleep.
·
For the vision impaired. There are all kinds of gadgets that can
make life a little easier for people with low or no vision. Try a wristband
that shakes to give directions or a new ‘feeling fireworks’ display that simulates
the visual experience through touch.
If
you’re stressing because you cannot find the right gift, remember the best gift
is time. Instead of buying things, invite the people on your gift list to join
you for an event or an activity.
Weekly
Focus – Think About It
“I slept and I dreamed
that life is all joy. I woke and I saw that life is all service. I served and I
saw that service is joy.”
--Kahlil Gibran, Lebanese writer and poet
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.
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Sources:
