PEEK OF THE WEEK
July 30, 2018
Leif Hagen & Donna Roberts
The Markets
Is it a
sugar rush or something more sustainable?
Economic growth in the United
States was strong during the second quarter. Gross domestic product (GDP),
which is the value of all goods and services produced in the United States,
grew by 4.1 percent. That’s the fastest growth in four years, reported the BBC.
The news was received with
varying levels of enthusiasm. President Trump said the gain is “an economic
turnaround of historic importance” and thinks the economy should continue to
grow rapidly, reported Shawn Donnan in Financial
Times.
Economists were less certain.
They think second quarter’s GDP gains were underpinned by one-time factors.
These included high levels of profitability attributable to last year’s
corporate tax cuts and an increase in exports as U.S. producers and their
buyers abroad tried to avoid upcoming tariffs, reported Financial Times.
Another consideration is the
business cycle. The business cycle tracks the rise and fall of a country’s
productivity over time. The U.S. appears to be in the latter stages of the
current cycle. John Authers of Financial
Times explained:
“…President Donald Trump’s
self-congratulation yesterday was fully merited. Things are going according to
plan. This business cycle looks ever more like a normal one, which is a
fantastic and welcome development after an epochal crisis and then a decade of
doldrums…The advent of a normal cycle is itself a problem because a normal
cycle terminates with high interest rates and declining growth. The president
has voiced his disapproval of these things, but they are the logical and
sensible consequence of the economic developments that are now unfolding.”
In the United States, the Dow
Jones Industrial Average and the Standard & Poor’s 500 Index moved higher
while the NASDAQ Composite gave up some ground.
Data as of 7/27/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
0.6%
|
5.4%
|
13.9%
|
10.9%
|
10.8%
|
8.6%
|
|
Dow Jones Global ex-U.S.
|
1.5
|
-2.7
|
4.1
|
4.7
|
3.6
|
1.2
|
|
10-year Treasury Note (Yield
Only)
|
3.0
|
NA
|
2.3
|
2.2
|
2.6
|
4.0
|
|
Gold (per ounce)
|
-0.4
|
-5.6
|
-3.0
|
3.6
|
-1.6
|
2.9
|
|
Bloomberg Commodity Index
|
1.4
|
-3.8
|
0.7
|
-2.7
|
-7.6
|
-8.4
|
|
DJ Equity All REIT Total
Return Index
|
-0.6
|
0.0
|
2.1
|
7.4
|
8.1
|
8.2
|
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 camping season! In 1869, the first
recreational camping guide, Adventures in
Wilderness, was authored by minister William H.H. Murray and became a
bestseller. The book’s success may have owed something to a new train route
that made the Adirondacks more accessible. Time.com
reported his practical guide offered advice on important topics:
“For sleeping, he describes how to
make ‘a bed of balsam-boughs.’ On what to wear, he suggests bringing a ‘felt
hat,’ ‘stout pantaloons,’ and a ‘rubber blanket or coat.’ For warding off
woodchucks, ‘a stick, a piece of bark, or tin plate shied in the direction of
the noise will scatter them like cats.’ As for wolves, his technique would
likely not pass muster with fire wardens: ‘touch a match to an old stump and in
two hours there will not be a wolf within ten miles of you.’”
His book inspired Kate Field to
try camping, and she became an early advocate of land preservation. She wrote
for the Adirondack Almanac in 1870. A
more recent article in the publication reported:
“Field advised her readers to bring
a tent rather than kill trees. ‘It is cruel to stab a tree to the heart merely
to secure a small strip of bark,’ she said. ‘It is ungrateful to destroy the
pine and balsam that have given us our beds of boughs, and fanned us with their
vital breath. Let there be tents.’”
Additional advice can be found
in Civil War veteran John M. Gould’s 1877 guide to backpacking, titled How To Camp Out. He warned against the
allure of new gear:
“Do not be in a hurry to spend
money on new inventions. Every year there is put upon the market some patent
knapsack, folding stove, cooking-utensil, or camp trunk and cot combined; and
there are always for sale patent knives, forks, and spoons all in one…Let them
all alone: carry your pocket-knife…”
He might
have been willing to make an exception for some of the gear available today!
Weekly
Focus – Think About It
“Camping is nature's way of
promoting the motel business.”
--Dave Barry, Humorist
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.barrons.com/articles/stocks-at-a-standstill-as-earnings-offset-tariffs-1532131202 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/7-23-18_Barron's-Stocks_at_a_Standstill_as_Earnings_Offset_Tariffs-Footnote_3.pdf)
https://www.unicef.org/sowc2012/urbanmap/# (Place cursor over the country to find
country/population percentages.)
https://www.npr.org/sections/money/2018/07/20/630949390/the-market-for-air (Audio starts at 2:56)
