“Peek of the Week”
Market Commentary
November 4, 2019
The Markets
They
did it.
The
Federal Reserve lowered interest rates last week, as expected. There were no enthusiastic
fans singing the Baby Shark song, but the Federal Open Market Committee’s
decision was well received.
Reuters reported, “Gaps between market expectations and the
Fed’s own outlook have been wide at times this year, a source of concern for
policymakers who don’t want to kowtow to markets, but also don’t want to
surprise or disrupt them. But, the two are now roughly in line with the idea
that the Fed is on hold and the economy continuing to chug along, a fact
highlighted by data showing 128,000 jobs were created in October…”
Last
week’s unemployment report was full of good news. It reported job gains and moderate
pay increases, according to Barron’s,
but there was a counterintuitive twist. The unemployment rate increased even
though the economy added new jobs. That was good news, too, because it meant
more people are returning to the workforce.
The
only bad news was found in manufacturing. The October ISM manufacturing index
ticked higher, but remains in contraction territory. CNBC reported, “Manufacturing has been at the heart of the
economy’s sluggishness, with a drop in business investment a big reason for the
third quarter’s sluggish 1.9 percent [economic] growth pace.”
Barron’s attributed softness in manufacturing to the ongoing
U.S.-China trade war.
By
the end of the day on Friday, the Standard & Poor’s 500 Index had closed at
a record high three times in five days. The Nasdaq Composite also reached a
record high.
Data as of
11/1/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
1.5%
|
22.3%
|
11.9%
|
13.3%
|
8.7%
|
11.4%
|
|
Dow Jones Global ex-U.S.
|
1.2
|
13.4
|
8.1
|
5.6
|
1.9
|
2.8
|
|
10-year Treasury Note (Yield Only)
|
1.7
|
NA
|
3.2
|
1.8
|
2.4
|
3.4
|
|
Gold (per ounce)
|
-0.3
|
17.7
|
22.3
|
5.4
|
5.3
|
3.6
|
|
Bloomberg Commodity Index
|
1.0
|
4.6
|
-4.0
|
-1.7
|
-7.4
|
-4.9
|
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.
what
will we do with Parking garages? As
the popularity of ride-sharing services and personal transportation options (like
scooters and bicycles) grows, the need for cars in urban areas may diminish.
The
arrival of autonomous vehicles could reduce demand even further.
Pew Research explained, “By 2030, 15 percent of new cars sold will
be totally autonomous, according to one estimate. One in 10 will be shared. And,
as it becomes easier for people to summon shared or autonomous cars when they
need them, fewer people will want to own their own vehicle, meaning fewer cars
overall.”
So,
what’s going to happen to all of the parking garages?
There
are a lot of interesting ideas about how parking garages might be repurposed.
Some companies plan to reserve the spaces for autonomous vehicles. Others are remodeling
garages to accommodate businesses and services.
For
example, one company is buying properties with the intention of turning them
into “commercial kitchens for delivery-only restaurants and other consumer
services.” Other possibilities include:
·
Recreational
areas
·
Gyms
·
Movie theaters
·
E-commerce
distribution centers
·
Flood protection
areas
·
Urban farms
·
Apartment
buildings
The
co-CEO of an architecture and design firm told Axios News, “An obvious and functional challenge we face is that
these structures were not originally designed for human habitation. These
spaces often require us to raise the floor height, level the floors between
ramps and incorporate design techniques that bring natural light into the
space.”
Redeveloping
parking garages may be challenging and costly, but it could create
opportunities for investors.
Weekly Focus – Think About It
“Before you
become too entranced with gorgeous gadgets and mesmerizing video displays, let
me remind you that information is not knowledge, knowledge is not wisdom, and
wisdom is not foresight. Each grows out of the other, and we need them all.”
--Arthur
C. Clarke, Science fiction writer and futurist
Best regards,
Leif
M. Hagen
Leif
M. Hagen, CLU ChFC
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, the Representative’s Broker/Dealer, or Registered Investment
Advisor, and should not be construed as investment advice.
*
This newsletter was prepared by Carson Coaching. Carson Coaching is not
affiliated with the named firm.
*
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. The volatility of indexes could be
materially different from that of a client’s portfolio. Unmanaged index returns
do not reflect fees, expenses, or sales charges. Index performance is not
indicative of the performance of any investment. You cannot invest directly in
an index.
*
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.
* 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.
*
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