Tuesday, February 28, 2017

Womack Weekly Commentary: February 27, 2017



­Womack Weekly Commentary


February 27, 2017

The Markets

Once upon a time, five blind men discovered an elephant. Each man examined a different part of the elephant and formed a unique impression about the animal. One believed an elephant was like a pillar, while another decided an elephant was like a snake.

In recent weeks, stock and bond markets have been telling different stories, too.

Following a rally on Friday, the Dow Jones Industrial Average finished at a record high for the 11th time last week. Reuters reported major U.S. benchmark indices have been driven higher by optimism about tax reform, eased regulation, and increased infrastructure spending.

Both Reuters and Financial Times wrote some investors have become more cautious amidst growing doubts about the pace at which the new administration’s economic policies may be achieved, as well as concerns about the outcome of European elections. These concerns are reflected in the bond market. Barron’s reported:

“The market’s recent advance has taken place on expectations of the reflationary impact of the Trump administration’s policies…the action in global bond markets suggests something else. The 10-year U.S. Treasury yield ended the week at 2.317 percent, the lowest since late November, despite the reflation trade in stocks and expectations of a Fed hike by June, if not May. Even more startling was the slide in the German two-year yield, to minus 0.95 percent, by week’s end, close to a record low, amid growing concern about France’s coming presidential election. While stock investors are smiling at daily Dow records, the bond crowd seems to be hunkering down.”

Who is correct? As with the folk tale about the elephant, both stock and bond markets may be right. Fiscal stimulus could boost economic growth, supporting higher stock values. However, the positive effects of a potential stimulus package are unlikely to be felt before 2018, according to Treasury Secretary Mnuchin. In the meantime, uncertainty about governments and policies at home and abroad may have investors opting for investments they perceive to be lower risk, such as U.S. Treasuries, and that could keep bond yields lower than some had expected.



Data as of 2/24/17
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
0.7%
5.7%
22.7%
8.6%
11.6%
5.0%
Dow Jones Global ex-U.S.
-0.2
5.4
18.5
-1.9
1.5
-1.3
10-year Treasury Note (Yield Only)
2.3
NA
1.7
2.8
2.0
4.6
Gold (per ounce)
1.3
8.2
0.2
-2.1
-6.7
6.2
Bloomberg Commodity Index
-0.7
0.0
15.4
-13.2
-10.2
-6.6
DJ Equity All REIT Total Return Index
2.1
4.2
19.5
11.7
11.5
4.6
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.

the best inventions of 2016. Late last year, Time Magazine selected 25 inventions that “are making the world better, smarter, and – in some cases – a little more fun.” Past editions have included underground parks, gluten sniffers, and the desktop DNA lab. For 2016, the list included:

·         Spherical tires. Intended for self-driving cars, spherical tires move in every direction, allowing cars to maneuver in new and unexpected ways. For example, a car can slide sideways into a parallel parking space. A critical difference between current tires and spherical tires is magnetic levitation. That’s right. The tires hover beneath the car instead of being bolted on.

·         Levitating light bulbs. This wireless floating light bulb “relies on electromagnetism to levitate and spin, and on resonant inductive coupling – a technical term for wireless power transmission – to shine.” The bulbs were so popular, the company created levitating clocks (with custom orbits that can be set for one minute or one year) and planters.

·         Smarter toothbrushes. The war on gum disease is never over. Dental hygiene slackers may find using these electric toothbrushes, which vibrate every 30 seconds to remind users to switch brush position, more rewarding. Next up: a more satisfying flossing experience.

·         Assistive tableware. If you have a loved one with a cognitive disability, assistive tableware may provide a mealtime solution, helping users eat more and maintain their dignity. The trick is in the design – bright colors, wide rubber bases, and easy-to-hold cups and flatware.

·         Playful prosthetics. A new prosthetic arm for children encourages play and is likely to make siblings and friends jealous. “When they need a hand, they have one. But they can replace it with any number of toy-like attachments, all of which are compatible with” a famous brand of building blocks.

It’s always impressive to discover what a well-leavened blend of technology and cleverness will produce.

Weekly Focus – Think About It

“Their conclusion: more gender diverse companies offer similar return with lower volatility. In other words: More gender diversity, particularly in corporate settings, can translate to increased productivity, greater innovation, better decision-making, and higher employee retention and satisfaction.”
--Morgan Stanley, An Investor’s Guide to Gender Diversity

Best regards,

Womack Investment Advisers, Inc.


WOMACK INVESTMENT ADVISERS, INC.
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013
California Office: 4660 La Jolla Village Dr., Ste. 500 - San Diego, CA 92122

Phone (405) 340-1717 - Toll Free (877) 340-1717 

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.
* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.

* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance 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 indices 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 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.

* 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.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

* To unsubscribe from the Womack Weekly Commentary please reply to this e-mail with “Unsubscribe” in the subject line, or write us at michelle@womackadvisers.com.



Sources:











Tuesday, February 21, 2017

Womack Weekly Commentary: February 21, 2017



Womack Weekly Commentary


February 21, 2017

The Markets

Up!

Four major U.S. benchmark stock indices closed at record highs for four consecutive days during Valentine’s Day week, reported Financial Times (FT).

To date, positive corporate earnings and robust investor confidence have offset fiscal and political uncertainty and helped push U.S. stock markets higher, said sources cited by FT. With 82 percent of companies in the Standard & Poor’s 500 Index reporting, corporate earnings are up 4.6 percent for the fourth quarter of 2016, and the Investors Intelligence Advisors Sentiment survey showed bullishness at a 12-year high last week, according to CNBC.com.

While bullish performance is welcome by stock investors, a Barron’s article titled, ‘Memo to Investors: What Goes Up Must Come Down,’ listed the responses of traders at a firm whose chief market strategist asked:

“In order to stay long U.S. equities, you have to believe...what? Here are some answers: Trump’s recent troubles are just the typical pains of any new administration. The Federal Reserve hikes rates twice, not three times, in 2017, and the yield on 10-year Treasuries stays at or below 3 percent. Oil prices remain stable. The Street, for once, is too pessimistic on earnings, but since analysts already forecast profit growth of 10.5 percent in 2017 and 11.7 percent in 2018, lower taxes must goose growth.

To this list, [the chief strategist] added the following: Trump doesn’t introduce overtly protectionist policies. U.S. growth stays in the 2 percent to 3 percent range until Trump’s economic agenda passes Congress. And no geopolitical event either increases global energy prices or dampens U.S. consumer confidence.”

Stock markets may be highly valued, but the Conference Board Leading Economic Index, which was designed to determine highs and lows in the business cycle, indicates the U.S. economy is doing well. The index increased for three consecutive months (November through January). The Conference Board’s director of business cycles and growth research, Ataman Ozyildirim, said, “The January gain was broad based among the leading indicators. If this trend continues, the U.S. economy may even accelerate in the near term.”



Data as of 2/17/17
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
1.5%
5.0%
22.0%
8.5%
11.6%
4.9%
Dow Jones Global ex-U.S.
0.8
5.6
17.4
-1.4
1.9
-1.1
10-year Treasury Note (Yield Only)
2.4
NA
1.8
2.7
2.0
4.7
Gold (per ounce)
0.7
6.8
2.3
-2.3
-6.4
6.3
Bloomberg Commodity Index
-1.4
0.7
15.9
-12.8
-9.6
-6.2
DJ Equity All REIT Total Return Index
0.2
2.1
19.6
11.0
10.9
4.1
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.

things you didn’t know your cat wanted. Cat wine didn’t win the first Pet Care Innovation Prize – that went to a dishwasher-safe bowl that connects to the pet owner’s phone and Wi-Fi – but the product has been in the news. Hostilities appear to have broken out between competing start-up companies that make faux wine for cats (and a few faux wines for discriminating dogs). The New York Times reported:

“But already the company that brought its products to market first…‘the original cat winery’ – is accusing its newer competitor…of being a copycat…Both have come up with clever names for their products: For $11.95, people can buy Fluffy an 8-ounce bottle of Catbernet or Pinot Meow…Or for $14.95, they can pour 12 ounces of Meow & Chandon…Since alcohol can harm cats, these products are essentially catnip water, which can make a cat loopy and an owner happy. But based on a wine tasting I conducted at a local cat cafe-slash-adoption center, the products are primarily catnip for the owners: The shelter cats did not like wines from either company – only two of them indulged – but the people visiting the tastings loved the concept.”

The challenge for companies that want cats to enjoy their wines, according to data from National Geographic, is the active ingredient in catnip – the oil found on catnip’s stems and leaves – functions as a pheromone. While humans have ingested catnip for years in teas that assist digestion or reduce tension, cats prefer to smell the stuff. That could make the bouquet of cat wine quite important. Next on the docket for the cat wine start-ups: products for the next generation – kittens.

If cat wine sounds over-the-top to you, ponder this: One of the cat wine start-ups sold half of a million dollars worth of pet wines last year.

Weekly Focus – Think About It

“Stories matter. Many stories matter. Stories have been used to dispossess and to malign, but stories can also be used to empower and to humanize. Stories can break the dignity of a people, but stories can also repair that broken dignity.
--Chimamanda Ngozi Adichie, Nigerian novelist

Best regards,

Womack Investment Advisers, Inc.


WOMACK INVESTMENT ADVISERS, INC.
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013
California Office: 4660 La Jolla Village Dr., Ste. 500 - San Diego, CA 92122

Phone (405) 340-1717 - Toll Free (877) 340-1717 


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.

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance 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 indices 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 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.
* 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.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the Womack Weekly Commentary please reply to this e-mail with “Unsubscribe” in the subject line, or write us at michelle@womackadvisers.com.

Sources: