PEEK OF THE WEEK
May 22, 2018
Leif Hagen & Donna Roberts
The Markets
Too much?
Too little? Or just right?
U.S. stock markets were
relatively calm, although they finished the week lower. U.S. Treasury yields
hit a 7-year high and finished the week above 3 percent. While these were
notable, the most remarkable events last week occurred beyond our borders.
These include:
·
The
Vatican publishing a position paper on financial markets. Its opening was,
“Economic and financial issues draw our attention today as never before because
of the growing influence of financial markets on the material well-being of
most of humankind. What is needed, on the one hand, is an appropriate
regulation of the dynamics of the markets and, on the other hand, a clear
ethical foundation that assures a well-being realized through the quality of
human relationships rather than merely through economic mechanisms that by
themselves cannot attain it.”
·
The royal
wedding boosting the British economy. A normal Britain wedding costs about
£18 thousand and includes about 80 guests. Prince Harry’s nuptials were a bit
more lavish. A wedding planning company estimated the cost of hosting 600 or
more guests at £32 million ($43 million in U.S. dollars). The largest component
of the cost was £30 million for security, which included drone destroyers.
·
Venezuela’s
oil-based economy continuing to collapse as oil prices rise. “Venezuela
leads the world in two things: oil reserves and incompetence,” opined The Washington Post. Poor management of
the state-run oil industry has caused production to drop 23 percent since
December. The country’s declining production helped push oil prices higher last
week. Prices are at levels last seen in 2014, reported Financial Times. Regardless of the country’s economic woes, this
weekend’s election is not expected to oust President Nicolás Maduro.
Rising oil prices have pushed
the cost of gas higher, but that’s not expected to deter Memorial Day
travelers, according to USA Today. We
wish you safe travels during the holiday weekend.
Data as of 5/18/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
-0.5%
|
1.5%
|
14.7%
|
8.4%
|
10.2%
|
6.6%
|
|
Dow Jones Global ex-U.S.
|
-0.9
|
-0.5
|
11.9
|
2.7
|
3.2
|
-0.2
|
|
10-year Treasury Note (Yield
Only)
|
3.1
|
NA
|
2.2
|
2.2
|
2.0
|
3.8
|
|
Gold (per ounce)
|
-2.7
|
-0.6
|
2.6
|
1.7
|
-1.0
|
3.6
|
|
Bloomberg Commodity Index
|
0.4
|
2.5
|
8.4
|
-4.9
|
-7.4
|
-8.3
|
|
DJ Equity All REIT Total
Return Index
|
-3.0
|
-6.5
|
-0.4
|
4.3
|
4.8
|
5.9
|
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.
did you know there’s a billionaire census? Last
week, the fifth edition of the Billionaire
Census was released. Apparently, the wealth of billionaires increased by 24
percent during 2017. In addition, the billionaire population, which had
suffered reduced numbers since 2015, expanded. It now includes 2,754
individuals. The previous high was 2,473 in 2015. According to Wealth-X:
·
816 live in the Asia-Pacific region
·
884 live in the Americas
·
1,054 live in Europe, the Middle East, and
Africa
There is a bit of disagreement
about the size of the ‘Three-Comma Club’ and the rate at which its wealth is
increasing. In March 2018, Forbes
reported there were “…2,208 billionaires from 72 countries and territories
including the first ever from Hungary and Zimbabwe. This elite group is worth
$9.1 trillion, up 18 percent since last year. Their average net worth is a
record $4.1 billion. Americans lead the way with a record 585 billionaires,
followed by Mainland China with 373.”
Two hundred
and fifty-six women made the list, including 42 new additions.
The Giving Pledge is another
exclusive group that some billionaires have joined. The objective of the Pledge
is to “…help address society’s most pressing problems by inviting the world’s
wealthiest individuals and families to commit more than half of their wealth to
philanthropy or charitable causes either during their lifetime or in their
will.”
As of
February 2018, 175 billionaires from 22 countries had joined.
Weekly
Focus – Think About It
“Philanthropy is almost the only
virtue which is sufficiently appreciated by mankind.”
--Henry David Thoreau, American essayist and
naturalist
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
* 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:
