PEEK OF THE WEEK
September 4, 2018
Leif Hagen & Donna Roberts
The Markets
Where
is our country’s biggest export market?
Markets
were fired up last week after the United States and Mexico agreed on new trade
rules. The Standard & Poor’s 500 (S&P 500) Index reached an all-time
high and finished the month of August up about 3 percent, reported Michael
Sheetz, Thomas Franck, and Alexandra Gibbs of CNBC.
During
the latter half of last week, though, the S&P 500 gave back some gains. A
hitch in the giddy-up of trade talks between the United States and Canada caused
the index to stumble. Damian Paletta, Jeff Stein, and Heather Long of The Washington Post explained:
“High-stakes
trade negotiations between the White House and Canadian leaders unraveled
Friday, a major setback in President Trump’s effort to redraw the North
American Free Trade Agreement…the United States and Canada have interwoven
economies, with integrated supply chains and vast amounts of trade. The value
of goods and services sold between the two countries last year reached $673.1
billion, making Canada the United States’ largest export market for goods.”
The
United States exported about $341 billion of goods and services to Canada in
2017, according to The Office of the U.S.
Trade Representative website. Our top exports to Canada during 2017 included:
·
Services ($58 billion)
·
Vehicles ($52 billion)
·
Machinery ($43
billion)
·
Electrical machinery
($25 billion)
·
Agricultural products
($24 billion)
·
Mineral fuels ($20
billion)
·
Plastics ($13 billion)
Trade
talks are expected to resume next week.
Data as of 8/31/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard
& Poor's 500 (Domestic Stocks)
|
0.9%
|
8.5%
|
17.4%
|
13.7%
|
12.1%
|
8.6%
|
|
Dow
Jones Global ex-U.S.
|
0.4
|
-5.1
|
0.9
|
5.9
|
3.1
|
1.5
|
|
10-year
Treasury Note (Yield Only)
|
2.9
|
NA
|
2.1
|
2.2
|
2.9
|
3.8
|
|
Gold
(per ounce)
|
0.4
|
-7.3
|
-8.3
|
1.7
|
-2.9
|
3.9
|
|
Bloomberg
Commodity Index
|
0.1
|
-5.0
|
-1.1
|
-2.7
|
-8.5
|
-7.6
|
|
DJ
Equity All REIT Total Return Index
|
0.8
|
4.7
|
6.8
|
10.9
|
11.2
|
7.9
|
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.
Prepare for a shake up! From
Reuters to Marketplace, economic and financial news shows like to ‘do the numbers.’
They often review economic indicators, Federal Reserve rate changes, or
benchmark index performance.
In
general, these statistics are intended to help people gauge how economies and
markets are performing. For instance, when Gross Domestic Product (GDP) – the
value of all goods and services produced by a nation during a certain period of
time – moves higher, it means the economy grew during the period. When GDP
moves lower, the economy contracted during the period.
Asset
managers and investors rely on benchmark indices, like the S&P 500 Index,
to measure the relative performance of investment portfolios. The S&P 500
is a benchmark for large U.S. company stocks. It includes companies from
diverse sectors including:
·
Information technology
·
Healthcare
·
Financials
·
Consumer discretionary
·
Industrials
·
Consumer staples
·
Energy
·
Utilities
·
Real estate
·
Materials
·
Telecommunications
services
But,
wait, change is coming!
Soon,
benchmark indices will have a new sector. At the end of September 2018,
Telecommunications Services will become Communication Services. The name is
changing and so are the companies that will be included in the sector. Ben
Levisohn at Barron’s reported:
“The
biggest changes will be around some prominent companies that will migrate out
of the information-technology and consumer-discretionary sectors and into a new
communication-services sector…[The changes] certainly don’t herald any
fundamental changes for the companies involved. But they do have the potential
to create short-term noise…”
If
you’d like to learn about the ways sector changes may affect benchmark indices,
give us a call.
Weekly Focus – Think About
It
“Progress
is impossible without change, and those who cannot change their minds cannot
change anything.”
--George Bernard
Shaw, Irish playwright
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.
* To unsubscribe from the
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Sources:
https://www.barrons.com/articles/tech-stocks-could-be-winners-in-big-sector-shift-1535759312 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/09-04-18_Barrons-Tech_Stocks_Could_be_Winners_in_Big_Section_Shift-Footnote_8.pdf)
