“Peek of the Week”
Market Commentary
October 14, 2019
The Markets
The
world breathed a sigh of relief last week when the United States and China took
a step toward a trade-war truce.
Financial Times reported the United States agreed to not increase
tariffs from 25 percent to 30 percent on $250 billion of Chinese imports next
week. (Current tariffs remain in place, and it is possible new tariffs will be
imposed on additional Chinese goods – electronics, apparel, and other consumer items
– in mid-December.)
In
return, China agreed to purchase $40 to $50 billion of agricultural goods,
including soybeans and pork, although no time frame was established for the
purchases. It remained unclear what progress was made on intellectual-property
protection and rules to prevent currency manipulation, reported The Wall Street Journal (WSJ).
U.S.
stock markets responded enthusiastically to news about one of the great
uncertainties hanging over economic growth, namely the trade war between the
United States and China, might be resolved. However, after the details of the
deal were announced, markets gave back some gains.
“The
tentative truce underwhelmed some international businesses that had been hoping
the United States and China would finish up a deal that cemented more sweeping
structural changes in China’s economy, eliminated additional tariffs scheduled
to go into place in December, and even rolled back existing tariffs both sides
have added to imports from each country,” reported WSJ.
Derek
Scissors, an American Enterprise Institute trade expert and White House advisor
told WSJ, “If this turns out to be
all there is, we could have achieved these results a year ago or more.”
Yields
on U.S. Treasury bonds moved higher during the week, and the yield curve
righted itself, reported MarketWatch.
The change reflected optimism about trade negotiations. Bond markets also embraced
a Federal Reserve announcement it will resume buying Treasuries each month to
ensure the banking system has sufficient reserves.
The
United States and China hope to have a written draft of the phase-one agreement
finalized during the next few weeks.
Data as of
10/11/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
0.6%
|
18.5%
|
8.9%
|
11.6%
|
9.6%
|
10.7%
|
|
Dow Jones Global ex-U.S.
|
1.9
|
9.5
|
3.5
|
4.2
|
1.7
|
2.1
|
|
10-year Treasury Note (Yield Only)
|
1.8
|
NA
|
3.1
|
1.8
|
2.3
|
3.4
|
|
Gold (per ounce)
|
-1.3
|
15.4
|
22.7
|
5.8
|
3.8
|
3.4
|
|
Bloomberg Commodity Index
|
1.2
|
2.8
|
-8.3
|
-2.9
|
-7.9
|
-5.0
|
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.
the
nicest place in america. There are
some people who scorn being nice (a.k.a. amiable, agreeable, pleasant). They
equate it with being uninteresting or boring. What they fail to understand is
being nice is often more challenging than the alternative.
Years
ago, Marilyn Zeilinski penned a Chicago
Tribune article entitled, “Being Nice Is Hugely Underrated.” In it, she
explained:
“Eventually
I discovered that being nice is hard work. It is strong enough to shovel the
elderly neighbor's driveway and as brave as a child inviting, ‘Come play with
me!’ to another child exiled by unpopularity…Niceness is not weakness, as I
once thought. Niceness stands up for itself, though politely, if someone cuts
in line. Most of all, niceness is not safe. Safety is keeping your head down,
minding your own business. Niceness reaches out, and that is riskier than a
cocoon of self-interest. But it is worth it.”
Residents
of Columbiana, Ohio, have chosen to embrace ‘nice.’ That’s why Reader’s Digest (RD) recently named the
town 2019 Nicest Place In America.
How
nice is Columbiana?
Good News Network reported the town has, “A baker who donates freely to
support causes of every kind, the real-estate developer who offers a year
rent-free to promising entrepreneurs who may not have the resources to get
started on their own, the local philanthropist who returned to his hometown to
donate $500,000 to rebuild the town’s beloved Firestone Park.”
Columbiana
isn’t the only nice place in America. There are a lot of places where people
work hard and help make each other’s lives better. In 2019, RD recognized a place or town in every
state.
Nice
can be inspiring.
Weekly Focus – Think About It
“Attitude is a choice. Happiness is a
choice. Optimism is a choice. Kindness is a choice. Giving is a choice. Respect
is a choice. Whatever choice you make makes you. Choose wisely.”
--Roy T. Bennett, Author
Best regards,
Leif
M. Hagen
Leif
M. Hagen, CLU, ChFC
LPL Financial Advisor
LPL Financial Advisor
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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.ft.com/content/28cc18f0-ec61-11e9-a240-3b065ef5fc55 (or
go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/10-14-19_FinancialTimes-US_Agrees_Limited_Trade_Deal_with_China-Footnote_1.pdf)
