“Peek of the Week”
Market Commentary
July 8, 2019
The Markets
What will the Federal Reserve
do now?
There was unexpected economic
news last week. On Friday, the Bureau of Labor Statistics announced 224,000 new
jobs were added in June, which was more than analysts had anticipated. The
gains were offset a bit by reductions in April and May employment estimates.
However, overall, the pace of jobs growth during second quarter was fairly
consistent with jobs growth during the first quarter, reported Matthew Klein of
Barron’s.
Strong employment numbers
invigorated some investors. As a result, the Standard & Poor’s 500 Index,
Dow Jones Industrial Average, and Nasdaq Composite finished the week near
record highs.
Not everyone was jumping for
joy, however.
The performance of the bond
market continued to indicate some investors are worried about the possibility
of recession. The yield curve remained inverted last week with the 10-year
Treasury note trading at lower yields than 3-month Treasury bills. Yield curve
inversions have been harbingers of recession in the past, reported Ben Levisohn
of Barron’s.
Time may provide greater
clarity about the strength of the American economy. April Joyner of Reuters reported,
“It will
likely take several months of economic data - along with results from the
corporate earnings season later this month - to clarify the picture, investors
say. In contrast to Friday’s upbeat employment report, data earlier this week
showed U.S. manufacturing and service activity in June declined to multi-year
lows… Future data…may end up either
confirming recession fears or altogether dashing the hopes for interest-rate
cuts that have buoyed stocks.”
In its July meeting, the
Federal Reserve will examine economic data and decide whether to lower rates. Investors
have been anticipating a rate cut, reported Greg Robb of MarketWatch. If it doesn’t happen, stock markets could be a bit
volatile.
Data as of
7/5/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
1.7%
|
19.3%
|
9.3%
|
12.7%
|
8.6%
|
12.8%
|
|
Dow Jones Global ex-U.S.
|
0.7
|
12.2
|
-0.8
|
6.9
|
-0.1
|
4.6
|
|
10-year Treasury Note (Yield Only)
|
2.1
|
NA
|
2.8
|
1.4
|
2.6
|
3.5
|
|
Gold (per ounce)
|
-1.4
|
8.4
|
10.6
|
0.9
|
1.1
|
4.2
|
|
Bloomberg Commodity Index
|
-0.7
|
3.1
|
-7.5
|
-3.3
|
-9.8
|
-3.9
|
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; 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.
succumbing to
the power of digital persuasion or not. A
lot has been written about Americans and smartphones – the crowd favorite among
mobile devices. Eighty-five percent of U.S. participants in the 2018 Deloitte Global Mobile Survey owned
smartphones and checked their phones about 14 billion times a day.
Which amounts to approximately 52 times each. If you figure Americans
are awake about 960 minutes each day, they check their phones every 18 minutes.
Almost three-in-ten Americans say that what they see on social media
influences their decisions to buy or not buy. The percent rises to five-in-ten
for millennials, according to the UPS
Pulse of the Online Shopper Survey™.
It is little wonder social media influencers have become a staple of
digital marketing.
What are influencers? The Influencer
Marketing Hub describes an influencer like this:
“An influencer is an individual who has the power to
affect purchase decisions of others because of his/her authority, knowledge,
position or relationship with his/her audience.”
Influencing has become a bona fide career path, a job with has its own
set of Federal Trade Commission
guidelines. For example, truth in advertising requires influencers to indicate
when they’ve being paid to promote a product and also when they’ve received the
product for free. Consumers should see the letters #ad before a comment or
tweet when the influencer is promoting a brand or product.
Not everyone is impressed with the influence of influencers. CBC reported the owner of a Los Angeles
ice cream truck got fed up with requests for free ice cream in exchange for
online exposure. His solution was to start charging influencers twice the going
rate.
The lesson may be that influence should be used judiciously.
Weekly Focus – Think About
It
“One thing I've learned through
all the ups and downs is that if you're doing things right, then you have a
core group of people. Not just a core group like your homies or your buddies,
but a group of people that has a good influence on you, who you respect and
admire, and you know that if they're on your side, you're doing something
right.”
--Hope Solo, former United States
national soccer team goalkeeper
Best regards,
Leif
M. Hagen
Leif M. Hagen, CLU, ChFC
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 United States
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.
*
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.
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Sources:
https://www.barrons.com/articles/what-the-june-jobs-report-really-says-about-the-u-s-economy-51562334857?mod=hp_DAY_2 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/07-08-19_What_the_Jobs_Report_Really_Says_About_The+Economy.pdf)
https://www.barrons.com/articles/s-p-500-rallies-as-trade-truce-conquers-all-51562375561?mod=hp_LATEST (or go to s3://peakcontent/
Peak Commentary/07-08-19_The+S&P_500_Soared_Last_Weel_Because_A_Trade_Truce_Conguers_All.pdf)
https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/global-mobile-consumer-survey-us-edition.html [Click on download executive summary] (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/07-08-19_2018_Global_Mobile_Consumer_Survey_US_Edition.pdf)
