PEEK OF THE WEEK
June 4, 2018
Leif Hagen & Donna Roberts
The Markets
If the
countries were instruments, last week sounded like a fifth grade garage band.
World markets were buffeted by a
clamor of good, bad, and unexpected news last week. Events that captured media
and investor attention included:
·
Taxing
America’s allies. Early in the week, investors weren’t the only ones riled
by the administration announcement it would impose hefty trade tariffs on
American allies. “Brussels’ top trade official vowed to respond to Donald
Trump’s new tariffs on imports of steel and aluminum from the EU, Canada, and
Mexico with measures of its own, and warned that the EU has “closed the door”
on trade talks with the U.S.”
·
Breaking
protocol. A strong unemployment report helped settle volatility stirred up
by tariff talk. However, a preemptive Presidential tweet introduced
controversy. “While not breaking the 8:30 a.m. EDT embargo on the actual
numbers, Trump’s tweet appeared to violate a 1985 federal rule barring members
of the executive branch from commenting on the employment report until one hour
after the release of the report in order to avoid affecting ‘financial and
commodity markets,’” reported Barron’s.
·
Counting
chickens. Although the summit with North Korea is on the calendar again,
the commemorative Korea Peace Talks Coin is selling at a 20 percent discount in
the White House gift shop.
·
Puzzling
choices. Giuseppe Conte is Italy’s new Prime Minister. He has a tough job
ahead. Despite electing “…western Europe’s first anti-establishment government
bent on overhauling European Union rules on budgets and immigration,” Italians
aren’t keen on leaving the euro behind. Last week, “…opinion polls…showed
between 60 and 72 percent of Italians did not want to abandon the euro,” reported Reuters.
Despite the noise, the Standard
& Poor’s 500 Index and NASDAQ forged ahead last week. That may have
something to do with valuations. Barron’s
wrote, “…the S&P 500…now trades at 16.5 times 12-month earnings estimates,
down from 18.2 at the beginning of the year…”
Data as of 6/1/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
0.5%
|
2.3%
|
12.5%
|
9.0%
|
10.8%
|
7.0%
|
|
Dow Jones Global ex-U.S.
|
-0.8
|
-2.4
|
7.7
|
2.9
|
3.7
|
-0.1
|
|
10-year Treasury Note (Yield
Only)
|
2.9
|
NA
|
2.2
|
2.2
|
2.1
|
4.0
|
|
Gold (per ounce)
|
-0.7
|
-0.2
|
2.4
|
2.6
|
-1.6
|
3.8
|
|
Bloomberg Commodity Index
|
-0.5
|
2.6
|
9.7
|
-3.6
|
-7.3
|
-8.3
|
|
DJ Equity All REIT Total
Return Index
|
2.0
|
-2.4
|
2.5
|
6.1
|
7.5
|
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.
it’s water under the bridge. Water is so
common we tend to take it for granted. We drink it, cook with it, wash with it,
swim in it, and rarely give it much thought. We should, though, because fresh
water is more rare than many people realize. According to National Geographic, “Over 68 percent of the fresh water on Earth
is found in icecaps and glaciers, and just over 30 percent is found in ground
water. Only about 0.3 percent of our fresh water is found in the surface water
of lakes, rivers, and swamps.” Here are some other notable facts about water:
1.
Our planet is mostly H2O. However, more than 96
percent of the water on Earth is salt water.
2.
The atoms in the water you drink today were
around when dinosaurs roamed the Earth.
3.
Water is the only
compound on earth that can be found naturally in three forms – solid, liquid,
and gas.
4.
The average person in the United States uses 80
to 100 gallons of water each day, according to the U.S. Department of
Interior’s estimates.
5.
Thermal power
plants generate the majority of the world’s electricity – more than 81
percent – and cannot run without water.
6.
‘Day Zero’ is the day Cape Town, South Africa
will become the first major metropolis to run out of water. When it arrives,
residents will receive rations of seven gallons a day.
Fresh water may soon be top of
mind for everyone because it is rapidly becoming a scarce resource.
McKinsey & Company estimates suggest current water supplies
will meet just 60 percent of global demand by 2030. The fraction may be lower
in countries like China, India, and South Africa where water supplies are
already under stress.
Weekly
Focus – Think About It
“To find the universal elements
enough; to find the air and the water exhilarating; to be refreshed by a
morning walk or an evening saunter…to be thrilled by the stars at night; to be
elated over a bird's nest or a wildflower in spring – these are some of the
rewards of the simple life.”
--John Burroughs, American Naturalist
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/11d2890a-65b6-11e8-a39d-4df188287fff (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-04-18_FinancialTimes-Global_Markets_Rally_as_US_Jobs_Growth_Calms_Volatility-Footnote_1.pdf
https://www.barrons.com/articles/take-this-jobs-report-and-tweet-it-1527897844
(or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-04-18_Barrons-Take_this_Jobs_Report_and_Tweet_It-Footnote_2.pdf
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html
(Click on U.S. & Intl Recaps, “Italy and Spain steer investor
expectations”, scroll down to chart) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-04-18_Barrons-Global_Stock_Market_Recap-Footnote_5.pdf
https://www.barrons.com/articles/dow-shows-nerves-of-steel-amid-trade-tensions-1527897602 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-04-18_Barrons-Dow_Shows_Nerves_of_Steel_Amid_Trade_Tensions-Footnote_6.pdf
