“Peek of the Week”
Market Commentary
June 10, 2019
The Markets
Surprise! It was a great week
for markets.
Since the U.S.-China trade
conflict resumed in early May, investors have been off balance. The possibility
of escalating tariffs on Mexico heightened economic uncertainty. Then, last
week’s unemployment report arrived with less than stellar news – just 75,000
jobs were created in May. The number was well below expectations. The Bureau of Labor Statistics revised March
and April employment numbers downward, too.1, 2, 3
We know investors hate
uncertainty. So, why did major U.S. indices rally?
The answer may be hope. There
was hope negotiations with Mexico would produce results and tariffs would be
avoided. There was hope trade issues with China, in tandem with
less-than-stellar economic news, would encourage the Federal Reserve to cut
rates. There was hope lower rates would stimulate the economy and lift share
prices higher.4, 5
Investors were right about
Mexico and tariffs.
On Saturday, The Wall Street Journal reported the United
States and Mexico reached a last-minute agreement on immigration that takes tariffs
off the table for now.6 It was good news. Before the agreement was
reached, the vice president of the Center for Automotive Research told PBS NewsHour, “…the cost of a vehicle, a
new vehicle in the U.S. is going to go up somewhere between $1,100 and $5,400 a
vehicle…It will hit GDP, up to [a] $34 billion hit to GDP. And we would see
almost 400,000 American jobs disappear.”7
Investors may be right about
interest rates, too. Expectations for Fed rate cuts are rising. MarketWatch reported, “The fed fund
futures market now show traders see a 72 percent chance of a rate cut at the
Fed’s July 31 meeting, and an around 23 percent probability of a rate cut in
the June 19 meeting.”8
Last week, the Dow Jones
Industrial Average and Standard & Poor’s 500 Index each gained more than 4
percent. The Nasdaq Composite was up 3.9 percent.4
Data as of
6/7/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard
& Poor's 500 (Domestic Stocks)
|
4.4%
|
14.6%
|
3.7%
|
10.8%
|
8.1%
|
11.8%
|
|
Dow
Jones Global ex-U.S.
|
2.4
|
8.1
|
-8.6
|
4.2
|
-0.5
|
3.9
|
|
10-year
Treasury Note (Yield Only)
|
2.1
|
NA
|
2.9
|
1.7
|
2.6
|
3.9
|
|
Gold
(per ounce)
|
3.5
|
4.6
|
3.4
|
2.6
|
1.4
|
3.6
|
|
Bloomberg Commodity Index
|
-0.7
|
0.6
|
-14.3
|
-4.4
|
-10.4
|
-4.8
|
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; 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 is the wedding going to cost you? You may not have noticed, but the average cost of weddings
has risen sharply – and not just for the bride and groom and their parents.
Costs have also increased for members of the wedding party and guests.9
One reason for rising costs
is the popularity of destination weddings. One-quarter of weddings take place
far from home, as couples opt for sunset weddings on the beach in the Virgin
Islands or nuptials shared under blossoming cherry trees in Washington, D.C.
and Japan. TripSaavvy.com reported:10,
11
·
The average
destination wedding has a budget of $28,000 for 48 guests.
·
Guests spend
almost $700 to attend. Of course, international venues may have a higher price
tag.
·
The honeymoon
cost for a destination wedding averages about $8,200.
In a Fox News opinion article, Liberty Vittert, Professor of Practical
Data Science at Washington University, offered her thoughts:9
“Yes,
we all know that the cost of weddings has become ridiculously exorbitant, at an
average cost of $33,391 per wedding (that’s almost $240 per guest). Meanwhile,
the median household income in the United States is $59,039. It is so common to
see this preposterous amount of money spent that it doesn’t really faze me anymore…As
a wedding guest to an in-town wedding, you need to account for clothing,
transportation, gift, and (potentially) booze. That can easily amount to $300.
If it is out of town, hold your horses. By adding in travel and accommodation
costs, you can easily be up to $700…If you are in the wedding, just throw your
wallet in the toilet and flush.”
If you have relatives you’d
rather not see, having your wedding on a mountaintop in Patagonia may be a
sound choice. More than one-half of those surveyed said cost would prevent them
from attending destination weddings.10
There are other options.
Couples could have small weddings near home or elope to exotic destinations and
then have celebratory parties when they get home. Whoever is footing the bill would
be able to bank the savings as an investment in the future.
Weekly Focus – Think About It
“Love recognizes no barriers.
It jumps hurdles, leaps fences, penetrates walls to arrive at its destination
full of hope.”
--Maya Angelou, Poet and author12
Best regards,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
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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 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.
*
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between two specific periods.
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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.
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Past performance does not guarantee future results. Investing involves risk,
including loss of principal.
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