Womack Weekly Commentary
March 27,
2017
The Markets
You’ve read it before – and it’s true. Markets hate
uncertainty.
Failure
to pass the American Healthcare Act, which was supported by Republican leaders
in Congress and President Trump, may have spooked U.S. stock markets last week.
In
an article titled, “How To Make Investing Decisions Based On Politics: Don't,” Nasdaq.com reported controversy over the
bill was “raising questions about [Republicans’] ability to focus on and pass
policies that the market has been eagerly anticipating, such as tax reform and
infrastructure spending.” Financial Times concurred:
“The
post-election stock market rally has been largely powered by hopes Donald
Trump’s administration would swiftly launch a bevy of aggressive economic
stimulus measures, including tax cuts, deregulation, and infrastructure
spending. However, Mr. Trump’s difficulty in Congress over the government’s
healthcare plan has prompted some reappraisal by investors of the prospect of
significant stimulus arriving later this year.”
Financial Times pointed out it’s likely other factors played a role
in investors’ decision-making, as well. Some professionals have become
concerned about market valuations. About 34 percent of fund managers believe
global equity markets are overvalued and 81 percent say U.S. equities are the
most expensive in the world, reported Fortune
Magazine citing Bank of America
Merrill Lynch’s survey of fund managers.
In
addition, estimates for corporate earnings have been revised lower for the
first quarter of 2017. Take that with a grain of salt, though. FactSet wrote, “In terms of estimate
revisions for companies in the S&P 500, analysts have made smaller cuts
than average to earnings estimates for Q1 2017 to date…”
Politics
is one factor affecting markets, and partisanship may be affecting consumer sentiment.
Richard Curtin, chief economist of
University of Michigan Surveys of Consumers, said consumers’ expectations
about future economic growth were split along party lines in March. “…among
Democrats, the Expectations Index at 55.3 signaled that a deep recession was
imminent, while among Republicans the Index at 122.4 indicated a new era of
robust economic growth was ahead.”
We live in interesting times!
Data as of
3/24/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
-1.4%
|
4.7%
|
15.1%
|
8.1%
|
10.6%
|
5.0%
|
Dow Jones Global ex-U.S.
|
0.0
|
7.8
|
13.2
|
-0.2
|
2.2
|
-0.9
|
10-year Treasury Note (Yield Only)
|
2.4
|
NA
|
1.9
|
2.7
|
2.2
|
4.6
|
Gold (per ounce)
|
1.5
|
7.6
|
-0.3
|
-1.6
|
-5.8
|
6.5
|
Bloomberg Commodity Index
|
-0.7
|
-3.4
|
6.7
|
-14.0
|
-10.2
|
-6.7
|
DJ Equity All REIT Total
Return Index
|
0.4
|
1.5
|
7.6
|
10.9
|
10.3
|
4.8
|
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.
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so,” wrote Mark Twain.
In
2016, NerdWallet commissioned a
survey* to get a better handle on Americans’ thoughts about lying when money is
involved. It’s interesting to note which money-saving lies participants found acceptable.
The list included:
·
Logging on to
someone else’s retail or media account to avoid subscription fees (33 percent)
·
Not reporting
under-the-table income to avoid taxes due (24 percent)
·
Lying about your
age or your child’s age to receive a discount at a restaurant or retailer (21
percent)
·
Lying about
annual mileage to lower auto insurance rates (20 percent)
·
Lying about income
on a loan or credit card application (12 percent)
·
Lying about
smoking tobacco to lower life insurance rates (11 percent)
(The
number in the parentheses reflects the percent of those surveyed who said the
lie was okay.)
The
survey found far more men than women believe it is acceptable to tell lies to
save money. For instance, 30 percent of men said it was okay not to report
under-the-table income to the IRS. Only 18 percent of women agreed. One-fourth
of male survey participants thought it was okay to fudge annual mileage to
receive lower auto insurance rates, while just 16 percent of female respondents
agreed.
Age
also makes a difference. Americans who are age 65 or older were far less likely
to find financial dishonesty acceptable:
“The
survey found that 11 percent of seniors say it is acceptable to use someone
else’s paid account for online movies, music, or articles to save on
subscription costs, compared with 39 percent of Americans ages 18-64. Just 7
percent of Americans ages 65 and older think it’s acceptable to lie about
annual mileage for lower auto insurance rates compared with 23 percent of
Americans ages 18-64. Among all of the lies in the survey, the one that gets
the most support from those 65 and older is not disclosing under-the-table income
to the IRS in order to pay less in taxes – 14 percent say that’s acceptable.”
When
it came down to it, “For all questions, retirees had the lowest rates of
acceptance of lies compared with students, employees, and the unemployed.”
*The
survey included 2,115 Americans, ages 18 and older, and was conducted February
18-22, 2016, by Harris Poll on behalf of NerdWallet. This survey is not based
on a probability sample and therefore no estimate of theoretical sampling error
can be calculated.
Weekly
Focus – Think About It
“I believe that
there is a subtle magnetism in Nature, which, if we unconsciously yield to it,
will direct us aright.”
--Henry
David Thoreau, American author
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
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
Website: www.womackadvisers.com
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:
[2] https://www.ft.com/content/aa4efa32-0f37-11e7-b030-768954394623 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-27-17_FinancialTimes-Why_are_Investors_On_Edge_Over_Trumps_Healthcare_Vote-Footnote_2.pdf)
[5] http://www.sca.isr.umich.edu (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/03-27-17_Univ_of_Michigan-Survey_of_Consumers-Footnote_5.pdf)
Comments
Post a Comment