 |
|
|
|
|
|
|
Weekly Market Commentary
May 2, 2016
|
 | Would You Prefer to Be... |  |
"Which would you prefer to be: a medieval monarch or a modern office-worker?" If you immediately answered medieval monarch, take a moment to ponder life without "...modern dentistry, antibiotics, air travel, smartphones, and YouTube."
Last week, The Economist used this example to illustrate the challenges of accurately measuring living standards over time. For many years, countries and economists have relied on gross domestic product (GDP), the value of all goods and services produced by a country over a specific period of time, to gauge relative prosperity. The publication pointed out GDP may not be an accurate measure of well-being because it does not account for changes in quality of output:
"...The benefits of sanitation, better health care, and the comforts of heating or air-conditioning meant that GDP growth almost certainly understated the true advance in living standards in the decades after the Second World War. But at least the direction of travel was the same. GDP grew rapidly; so did quality of life. Now GDP is still growing (albeit more slowly), but living standards are thought to be stuck.Part of the problem is widening inequality: median household income in America, adjusted for inflation, has barely budged for 25 years. But increasingly, too, the things that people hold dear are not being captured by the main yardstick of value."
Whether it accurately reflects growth in the United States or not, U.S. GDP gained 0.5 percent during the first quarter of 2016. Barron's reported investors were not encouraged by the less-than-robust growth rate or by the fact GDP growth in the Eurozone (0.6 percent) exceeded GDP growth in the United States during first quarter.
Weak corporate earnings also influenced market performance last week. So far, 62 percent of companies in the Standard & Poor's 500 Index have reported their results, and the numbers show first quarter earnings have declined by 7.6 percent, year-over-year. That is better than expected, according to FactSet, but nothing to write home about.
|
| Weekly Market Update | |
|
Data as of 4/29/16
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
| |
Standard & Poor's 500 (Domestic Stocks)
|
-1.3%
|
1.1%
|
-2.0%
|
9.0%
|
8.7%
|
4.7%
| |
Dow Jones Global ex-U.S.
|
0.1
|
1.7
|
-12.4
|
-1.3
|
-2.1
|
-0.6
| |
10-year Treasury Note (Yield Only)
|
1.8
|
NA
|
2.0
|
1.7
|
3.3
|
5.1
| |
Gold (per ounce)
|
3.4
|
21.0
|
6.3
|
-4.3
|
-3.5
|
6.9
| |
Bloomberg Commodity Index
|
3.0
|
8.9
|
-17.0
|
-14.0
|
-13.4
|
-7.1
| |
DJ Equity All REIT Total Return Index
|
-0.1
|
4.2
|
7.1
|
7.4
|
10.0
|
6.9
|
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; the DJ Equity All REIT Total Return Index does include reinvested dividends 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, Barron's, 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.
|
| When Someone Says, "Federal Budget," Do Your Eyes Glaze Over? | |
Apparently, enough folks tune out when the budget is mentioned that the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution developed a digital game to make the matter more palatable. 'The Fiscal Ship' gives players a chance to choose tax and spending policies for the United States and see how those choices affect the country.
These dollars-and-cents decisions aren't simple. The actions taken increase or reduce the country's debt and also help determine the kind of nation we'll be living in three decades from now. The game's description explains:
"America is looking at a permanent, growing mismatch between revenues and spending, and policymakers are faced with difficult decisions about how to reconcile important government priorities...with the tax revenues that the current tax code will yield...So your mission is to pick from a menu of tax and spending options to reduce the debt from projected levels over the next 25 years. Small changes to spending and taxes won't suffice. The choices are difficult, but the goal is achievable...To win the game, you need to find a combination of policies that match your values and priorities AND set the budget on a sustainable course."
Before you select policies, you'll be asked to choose the issues that are most important to you, such as: Shrink Government, Strengthen the Social Safety Net, Invest in the Future, Strengthen National Defense, and others.
Once you've prioritized the issues, you'll be given a laundry list of policy choices. That's when the tough decisions get made. As you develop your plan, you'll be shown how the decisions you're making affect revenue, spending, and the nation's debt as well as issues that are important to you.
Best Regards,
|
|
|
|
|
|
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
* Securities offered through Commonwealth Financial Network, Financial Member FINRA/SIPC.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Diversification does not protect against loss or assure a profit and there is no guarantee a diversified portfolio will outperform a non-diversified portfolio. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. * 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 London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ 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 TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * 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. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. * To unsubscribe from the Weekly Market Commentary please click here, or write us at 10801 Mastin Blvd, Suite 370; Overland Park, KS 66210 * To unsubscribe from the Weekly Market Commentary please reply to this e-mail with "Unsubscribe" in the subject line, or write us at 10801 Mastin Blvd, Suite 370; Overland Park, KS 66210
|
|
|
