“Peek of the Week”
Weekly Market Commentary
Weekly Market Commentary
June 24, 2019
The Markets
Everything
went up – and that’s unusual.
Randall
Forsyth of Barron’s explained, “Like
our major political parties, the stock and bond markets seem to live in two
different worlds these days. The former sits at record levels, suggesting we
live in the best of all possible worlds. The latter sees things as bad and only
getting worse.”
Here’s
what happened last week:
The
Federal Open Market Committee met last week (they decide whether the central
bank of the United States should push rates higher or move them lower). It left
rates unchanged, but indicated a willingness to lower rates in support of
economic expansion. That was music to the ears of some investors and the
Standard & Poor’s 500 Index rose to a record high, reported Sue Chang and
Mark DeCambre of MarketWatch.
The
Fed’s song was the same as the one already playing across the world. Central bankers
in Europe and Japan had signaled they were willing to encourage economic growth
by easing rates lower and using other tools available, reported Leika Kihara
and Daniel Leussink of Reuters. Their
attitude helped push world stock markets higher.
Last
week, the U.S. bond market gained value, too, as interest rates moved lower.
Falling interest rates suggested bond investors were hearing a different tune. When
investors are willing to accept lower yields, it suggests they’re worried about
what may happen and are seeking safety. In some parts of Europe, investors are
accepting negative yields – taking small losses to own government bonds they
perceive to be safe – because they are pessimistic about the future.
There
is plenty to be concerned about, including ongoing trade issues and conflict in
the Middle East. Only time will tell how recent events will affect the U.S. and
world economies.
Data as of
6/21/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
2.2%
|
17.7%
|
7.3%
|
12.2%
|
8.5%
|
12.7%
|
|
Dow Jones Global ex-U.S.
|
2.8
|
11.2
|
-2.7
|
5.8
|
-0.1
|
4.5
|
|
10-year Treasury Note (Yield Only)
|
2.1
|
NA
|
2.9
|
1.7
|
2.6
|
3.7
|
|
Gold (per ounce)
|
3.4
|
9.0
|
10.4
|
3.2
|
1.2
|
4.3
|
|
Bloomberg
Commodity Index
|
1.3
|
2.8
|
-8.8
|
-3.8
|
-10.4
|
-4.2
|
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.
A land without time. You may have heard: Sommaroey Island in Norway may do
away with time. Residents of the island don’t experience time as people
elsewhere do. From May to July, the sun doesn’t set on Sommaroey. From November
to January, it doesn’t rise.
Proponents of a time-free island zone say it would reduce
stress. “…the change would not mean that shops are
open 24/7, but that residents could make better use of the daylight,” reported
ABC News.
Living
without time is an astonishing idea.
In
modern life, time is a critical organizational tool. We divide our experience
into centuries, years, daytime and nighttime, hours and minutes. Our actions
are informed by schedules. We need to arrive at class, at work, at the bus
stop, at a restaurant, or at a ballgame at a specific time.
However,
time is not nearly as straightforward as it seems.
In
a review of Why Time Flies: A Mostly
Scientific Investigation, The Economist
opined, “Time is such a slippery thing. It ticks away, neutrally, yet it also
flies and collapses, and is more often lost than found. Days can feel eternal
but a month can gallop past. So, is time ever perceived objectively? Is this
experience innate or is it learned? And how long is ‘now,’ anyway? Such
questions have puzzled philosophers and scientists for over 2,000 years.”
Residents
of Sommaroey have been pondering life without time and whether it is actually
possible. The leader of the move to abolish time told ABC News, living without time, ‘is a great solution but we likely
won't become an entirely time-free zone as it will be too complex.’
Weekly Focus – Think About
It
“How
did it get so late so soon?”
--Dr. Seuss,
American 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.barrons.com/articles/low-interest-rates-could-have-surprising-benefits-51561165445?mod=hp_DAY_1 (or
go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/06-24-19_Barrons-Stocks_Soar_Yields_Sink_Whats_Next-Footnote_1.pdf)
https://www.economist.com/books-and-arts/2017/02/09/clock-watching (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/06-24-19_TheEconomist-Clock_Watching-Footnote_6.pdf)
Photo by Matthew
Henry from Burst
