“Peek of the Week”
Market Commentary
September 23, 2019
The Markets
There’s
a new theory in town.
Renowned
economist Robert Shiller’s new book suggests investors may be able to predict
and prepare for economic events by tracking popular stories.
Applying
the theory might have been a challenge last week. There were so many stories
with potential to move markets and affect the economy it was difficult to guess
which would be the most influential.
In
the end, on-again-off-again trade negotiations provided the spark that drove
markets lower. Barron’s explained:
“The
S&P 500 would have finished flat for the week – except it decided to drop
0.5 percent after reports that China had canceled a visit to Montana hit the
newswires…That’s not what we would have expected, given all of the week’s
excitement. Saudi Arabia’s oil infrastructure was attacked. The Federal Reserve
cut interest rates by a quarter-point. U.S. money markets went crazy and forced
the Fed to intervene, setting off comparisons to the collapse of Lehman
Brothers in 2008. And, yet, a Montana junket was the ultimate determinant of
whether the market finished up or down.”
On
Saturday, reports from U.S. trade representatives and China’s state-run news
agency emphasized trade discussions were ‘constructive’ and ‘productive’ and
would continue in October, reported The
New York Times.
Last
week, Federal Reserve Chair Jerome Powell mentioned trade wars 20 times in his
news conference, reported The Wall Street
Journal. “Other geopolitical risks figured less prominently or not at all.
Mr. Powell mentioned Brexit once, and tensions in Hong Kong and Saudi Arabia
didn’t come up.”
The
Fed chair emphasized the Fed is using the tools at its disposal to support
demand and counteract economic weakness. However, it has no way to resolve
trade issues. He pointed out uncertainty about trade has reduced business
investment across the United States and could hurt economic growth.
Until
an agreement is reached, stories told about U.S.-China trade issues are likely to
remain influential.
Data as of
9/20/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
-0.5%
|
19.4%
|
2.1%
|
11.8%
|
8.3%
|
10.9%
|
|
Dow Jones Global ex-U.S.
|
-0.2
|
10.5
|
-2.9
|
4.5
|
0.5
|
2.4
|
|
10-year Treasury Note (Yield Only)
|
1.8
|
NA
|
3.1
|
1.7
|
2.6
|
3.5
|
|
Gold (per ounce)
|
-0.1
|
17.2
|
24.3
|
4.6
|
4.4
|
4.2
|
|
Bloomberg Commodity Index
|
0.6
|
3.2
|
-5.6
|
-2.1
|
-7.8
|
-4.5
|
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.
What’s your gig? In a 2018 issue of the Harvard Business Review, an independent consultant compared working
in the gig economy (a labor market
characterized by the prevalence of short-term contracts or freelance work as
opposed to permanent jobs) to being a trapeze artist. Independent work
requires concentration and discipline. There is a stomach-dropping void between
assignments and exhilaration when a new assignment is landed.
When
you consider the risks of gig work, it’s remarkable so many people work
independently. About 20 to 30 percent of the working population in the United
States and Western Europe are gig workers, according to the McKinsey Global Institute.
People
work independently for a variety of reasons. Forty-four percent derive their
primary income from gig work (although 14 percent of these people would prefer
traditional employment). Fifty-six percent earn supplemental income from
independent work (16 percent of these people are financially strapped).
The
most popular gigs, according to appjobs,
are:
·
Delivery work
·
Freelance work
(editing, translating, photography, art, copywriting, design, and consulting)
·
Pet sitting
·
Cleaning
·
Driving
The
most lucrative gigs include:
·
Massage therapy
·
Freelance work
·
Home cooking
·
Teaching
·
Delivery work
The
gig economy is growing. However, there are issues that make it less attractive,
such as lack of benefits, income insecurity, and lack of training and
credentialing. These issues may create opportunities for entrepreneurs.
Weekly Focus – Think About It
“You have brains in your head. You have
feet in your shoes. You can steer yourself any direction you choose. You're on
your own. And you know what you know. And YOU are the one who'll decide where
to go…”
--Dr. Seuss, American children’s author
Best regards,
Leif
M. Hagen
Leif
M. Hagen, CLU, ChFC
LPL Financial Advisor
LPL Financial Advisor
P.S. Please feel free to forward this commentary
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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.
*
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/the-dow-jones-industrial-average-falls-for-week-despite-interest-rate-cut-51569026025?mod=hp_DAY_3 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/09-23-19_Barrons-The_Dow_Falls_as_Markets_Try_to_Figure_Out_What_Really_Matters-Footnote_2.pdf)
https://www.wsj.com/articles/analysis-powells-subtle-messaging-to-trump-on-trade-fight-11568971800 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/09-23-19_WSJ-Analysis-Powells_Subtle_Messaging_to_Trump_on_Trade_Fight-Footnote_4.pdf)
