“Peek of the Week”
Market Commentary
April 1, 2019
The Markets
“Fascinatingly
counterintuitive…”
That’s
how Michael Arone, an investment strategist, described the U.S. market
environment to Avi Salzman of Barron’s:
“‘Stocks
are rallying, but bond yields are reflecting much lower growth.’ Stocks rose
during the quarter because the Fed backed away from raising interest rates, and
investors grew more confident that the U.S. and China would sign a trade deal,
Arone said. The market was also rebounding from a very rough fourth quarter – ‘conditions
at the end of the year were wildly oversold,’ he noted.”
Through
the end of last week, the Standard & Poor’s 500 Index was up more than 13
percent year-to-date, despite falling corporate earnings and modest consumer
spending gains.
Consumer
optimism may have played a role in U.S. stock market gains. The University of
Michigan’s Surveys of Consumers Economist Richard Curtin reported:
“…the
last time a larger proportion of households reported income gains was in 1966.
Rising incomes were accompanied by lower expected year-ahead inflation rates,
resulting in more favorable real income expectations…Moreover, all income
groups voiced more favorable growth prospects for the overall economy…Overall,
the data do not indicate an emerging recession but point toward slightly lower
unit sales of vehicles and homes during the year ahead.”
The
Bureau of Economic Analysis released its report on economic growth in 2018 last
week. Real gross domestic product (GDP), which is a measure of economic growth
after inflation, was revised down to 2.2 percent in the fourth quarter of 2018.
Growth was up 2.9 percent for the year, though, which was an improvement on
2017’s gain of 2.2 percent.
Slowing
economic growth gives weight to bond investors’ expectations, while consumer
optimism supports stock investors’ outlook. Divergent market performance and
conflicting data make it hard to know what may be ahead. One way to protect
capital is to hold a well-diversified portfolio.
Data as of
3/29/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
1.2%
|
13.1%
|
7.3%
|
11.3%
|
8.7%
|
13.7%
|
|
Dow Jones Global ex-U.S.
|
-0.3
|
9.4
|
-7.1
|
5.8
|
0.5
|
6.7
|
|
10-year Treasury Note (Yield Only)
|
2.4
|
NA
|
2.7
|
1.8
|
2.7
|
2.7
|
|
Gold (per ounce)
|
-1.2
|
1.1
|
-2.2
|
1.9
|
0.1
|
3.4
|
|
Bloomberg Commodity Index
|
-0.8
|
5.7
|
-7.3
|
0.7
|
-9.6
|
-2.8
|
|
DJ Equity All REIT Total
Return Index
|
1.4
|
17.2
|
20.4
|
8.0
|
10.0
|
19.6
|
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, MarketWatch, 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.
how much does it cost to make money? You may not have given it much thought, but it costs
money to make money. In fact, the costs of the metals required to make some
U.S. coins is higher than the value of the coins! George Washington and Abraham
Lincoln might not approve, if they knew. Take this quiz to see what you know
about the cost and value of U.S. coins.
1. How much did it cost the U.S. Mint to make a U.S.
penny in 2018?
a. 0.5 cents
b. 1.25 cents
c. 2.06 cents
d. 3.0 cents
2. How much did it cost the U.S. Mint to make a U.S.
nickel in 2018?
a. 1.25 cents
b. 4.97 cents
c. 6.03 cents
d. 7.53 cents
3. What makes a coin valuable to a collector?
a. Metal
b. Age
c. Rarity
d. All of the above
4. Which of these coins is the most valuable to
collectors?
a. 1849 Coronet Head Gold $20 Double Eagle
b. 1913 Liberty Nickel
c. 1943-D Lincoln Wheat Cent Penny
d. 1835 Classic Head Gold $5 Half Eagle
Weekly Focus – Think About
It
According
to the Federal Reserve, the estimated lifespan of a $10 bill is 4.5 years. The
estimated lifespans of a $5 and $1 bill are 5.5 years and 5.8 years,
respectively. A $100 bill may last 15.5 years because it circulates less
frequently.
Answers:
1.
It cost 2.06
cents to make a one-cent coin that few people use. A group of citizens has been
encouraging the government to retire the penny.
2.
It cost 7.53 cents
to make a nickel in 2018.
3.
All of the above.
4.
The 1849 Coronet
Head Gold $20 Double Eagle is worth more than $16,600,000. It is one of the rarest U.S. coins.
Best regards,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
Leif M. Hagen, CLU, ChFC
P.S. Please feel free to forward this commentary
to family, friends, or colleagues. If you would like us to add them to the
list, please reply to this email with their email address and we will ask for
their permission to be added.
Securities
offered through LPL Financial Member FINRA/SIPC.
*
These views are those of Carson Coaching, and not the presenting Representative
or the Representative’s Broker/Dealer, and should not be construed as
investment advice.
*
This newsletter was prepared by Carson Coaching. Carson Coaching is not
affiliated with the named broker/dealer.
*
Government bonds and Treasury Bills are guaranteed by the U.S. government as to
the timely payment of principal and interest and, if held to maturity, offer a
fixed rate of return and fixed principal value.
However, the value of fund shares is not guaranteed and will fluctuate.
*
Corporate bonds are considered higher risk than government bonds but normally
offer a higher yield and are subject to market, interest rate and credit risk
as well as additional risks based on the quality of issuer coupon rate, price,
yield, maturity, and redemption features.
*
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.
*
All indexes referenced are unmanaged. Unmanaged index returns do not reflect
fees, expenses, or sales charges. Index performance is not indicative of the
performance of any investment.
*
The Dow Jones Global ex-U.S. Index covers approximately 95% of the market
capitalization of the 45 developed and emerging countries included in the
Index.
*
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.
*
The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an
index representing 30 stock of companies maintained and reviewed by the editors
of The Wall Street Journal.
*
The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ
system.
*
International investing involves special risks such as currency fluctuation and
political instability and may not be suitable for all investors. These risks
are often heightened for investments in emerging markets.
*
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.
*
Stock investing involves risk including loss of principal.
* The foregoing information has
been obtained from sources considered to be reliable, but we do not guarantee
it is accurate or complete.
*
There is no guarantee a diversified portfolio will enhance overall returns or
outperform a non-diversified portfolio. Diversification does not protect
against market risk.
*
Asset allocation does not ensure a profit or protect against a loss.
*
Consult your financial professional before making any investment decision.
*
To unsubscribe from the “Peek of the Week” please reply to this email with
“Unsubscribe” in the subject line or write us at: Hagen Financial Network,
Inc.; 4640 Nicols Road – Suite 203; Eagan MN 55122.
Sources:
https://www.barrons.com/articles/the-s-p-500-is-off-to-its-best-start-since-1998-51553908143?mod=hp_DAY_1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-01-19_Barrons-The_S_and_P_500_is_Off_to_Its_Best_Start_Since_1998-Footnote_1.pdf)
http://www.sca.isr.umich.edu (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-01-19_Surveys_of_Consumers-Final_Results_for_March_2019-Footnote_2.pdf)
https://www.usmint.gov/about/reports (Click on 2018 Annual Report, go to page 10)
