Market Commentary
June 17, 2019
The Markets
Are
we on the cusp of change?
The
United States is doing quite well. Randall Forsyth of Barron’s reported:
“…the
U.S. economy and stock market both seem to be doing better than OK, thank you,
as the expansion and bull market celebrate their 10th anniversaries.
Unemployment is around the lowest level in a half-century. The worst thing
seems to be that inflation continues to run slightly below the Fed’s 2 percent
target, a problem that might strike some as similar to being too rich or too
thin.”
The
economic facts are encouraging, but recent events have potential to knock the U.S.
economy off its tracks. The most significant threat may be a second round of oil
tanker explosions in the Gulf of Oman. The U.S. accused Iran and Iran denied
responsibility, reported The Economist. Tensions
in the region are on the rise.
U.S.-China
trade rhetoric heated up, too, which has some analysts concerned. It’s
difficult to discern what’s truly happening, though. Reuters reported the United States stopped the World Trade
Organization investigation of China’s treatment of intellectual property in
early June. Some believe the action signaled a thaw in trade relations.
This
week new concerns may rise to the fore. The Federal Reserve’s Open Market
Committee meets Tuesday and Wednesday. Some hope it will decide to lower rates,
while others believe a rate cut is unnecessary.
Major
U.S. stock indices gained value last week, despite a spate of bad news, but change
may be coming.
Data as of
6/14/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
0.5%
|
15.2%
|
3.8%
|
11.6%
|
8.3%
|
12.1%
|
Dow Jones Global ex-U.S.
|
-0.2
|
8.2
|
-8.2
|
6.2
|
-0.5
|
3.9
|
10-year Treasury Note (Yield Only)
|
2.1
|
NA
|
2.9
|
1.6
|
2.6
|
3.7
|
Gold (per ounce)
|
0.8
|
5.4
|
3.7
|
1.6
|
1.2
|
3.8
|
Bloomberg
Commodity Index
|
0.9
|
1.5
|
-13.5
|
-4.3
|
-10.4
|
-4.7
|
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.
plastic goes where few have gone
before. In 2012, filmmaker James
Cameron brought attention to the Mariana Trench, the deepest point on Earth
(6.8 miles down), when he took a solo dive into its depths. The seafloor of the
abyss also has been visited by at least one plastic bag, according to the Deep
Sea Debris Database on ScienceDirect.
The
Mariana Trench is just one of many unlikely places where plastic has been found.
Jesse Li of Axios reported, “A marine
biologist found 373,000 toothbrushes and 975,000 shoes on the beaches of a
remote string of islands in the Indian Ocean.” In addition, the manmade
material has made the trip to Point Nemo, the most remote location on Earth. Point
Nemo is more than 1,000 miles from civilization in every direction – the
farthest a person can get from dry land without heading into space, according
to Atlas Obscura.
The
pervasiveness of plastic is not too surprising. There is a lot of it in the
world. Globally, almost 400 million tons of plastic were produced in 2015.
Fifty-five percent of it was discarded, 25 percent was incinerated, and 20
percent was recycled, according to Our
World in Data.
The
glut of plastic pollution inspired Canada to ban single-use plastics last week.
The goal is to eliminate use by 2021. The European Union has taken similar
steps. As plastic use ebbs, new packaging materials are being developed.
Biodegradable seaweed bubbles may replace plastic water bottles. Paper made
from stone may wrap food products and fresh fruit may arrive to market wrapped
in palm leaves.
Innovation
creates opportunities for investors.
Weekly Focus – Think About
It
“Growth
for the sake of growth is the ideology of the cancer cell.”
--Edward
Abbey, American author and essayist
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/the-rate-cut-the-economy-doesnt-need-but-the-markets-do-51560557553?mod=hp_DAY_1 (or
go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/06-17-19_Barrons-The_Rate_Cut_the_Economy_Doesnt_Need_but_the_Markets_Do-Footnote_1.pdf)
https://www.economist.com/middle-east-and-africa/2019/06/13/who-is-blowing-up-ships-in-the-gulf (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/06-17-19_TheEconomist-Who_is_Blowing_Up_Ships_in_the_Gulf-Footnote_2.pdf)
https://www.barrons.com/articles/dow-jones-industrial-average-gains-as-interest-rate-decision-looms-51560555002?mod=hp_DAY_3 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/06-17-19_Barrons-The_Dow_Gains_Again_as_a_Decision_Looms_for_the_Federal_Reserve-Footnote_4.pdf)
https://www.goodreads.com/quotes/21664-growth-for-the-sake-of-growth-is-the-ideology-of
Photo by Dustan Woodhouse on Unsplash
Photo by Dustan Woodhouse on Unsplash
