Womack
Weekly Commentary
September
11, 2017
The Markets
Last
week, the aftermath of Hurricane Harvey and potency of Hurricane Irma dominated
hearts and minds, but there were some diversions and some welcome news, too.
The
NFL kicked off its 2017 season with the Chiefs’ win over the Patriots. The
men’s U.S. soccer team tied Honduras to stay in the running for a World Cup
spot. And, Sloane Stephens made the jump from 957th best on the
women’s tennis tour to U.S. Open Champion.
Also,
last week, President Trump signed a bipartisan bill authorizing relief for
victims of Hurricane Harvey. The damage from Harvey has been estimated at about
$50 billion, reported Yahoo! Finance,
and the damage from Hurricane Irma may be even greater.
The
signed bill also raised the debt ceiling, avoided a U.S. Treasury default, and
funded the government for three months. These aspects of the legislation may
have been more important to stock markets, according to a source cited by Barron’s:
“Dubravko
Lakos-Bujas, head of U.S. equity strategy and global quantitative research at
JPMorgan, observes that the S&P 500 has dropped about 2 percent when
hurricanes make landfall, as sectors that get slammed – think insurance
companies, hotels, and cruise lines – are offset by ones that benefit, like
autos, energy and equipment services, and basic materials for construction. A
failure to raise the debt ceiling or pass a budget, though, has typically caused
the market to drop 3 percent to 5 percent. ‘In essence, the market risk associated
with the failure of passing the budget and addressing the debt ceiling has been
pushed out for now…’”
Major
U.S. stock markets finished the week slightly lower. The Standard & Poor’s
500 Index remains less than 1 percent below its all-time high.
Data as of
9/8/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
-0.6%
|
9.9%
|
12.8%
|
7.1%
|
11.5%
|
5.4%
|
Dow Jones Global ex-U.S.
|
0.6
|
18.1
|
14.1
|
1.0
|
5.0
|
-0.2
|
10-year Treasury Note (Yield Only)
|
2.0
|
NA
|
1.6
|
2.5
|
1.7
|
4.3
|
Gold (per ounce)
|
2.0
|
16.2
|
0.2
|
2.3
|
-4.9
|
6.7
|
Bloomberg Commodity Index
|
-0.3
|
-3.1
|
-0.5
|
-12.0
|
-10.5
|
-6.7
|
DJ Equity All REIT Total
Return Index
|
0.6
|
7.7
|
1.8
|
8.4
|
9.9
|
7.0
|
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.
how do you protect personal data? Last week, Equifax, one of three major consumer credit
reporting agencies, was hacked. The New
York Times reported the company had data on more than 820 million consumers
and more than 91 million businesses worldwide. Estimates suggest 143 million
Americans may have been affected.
It’s
no surprise new ways to safeguard personal data are on the horizon. Some
involve blockchain technology, which underlies cryptocurrencies but has many
other potential applications. PCMag.com
described it like this:
“People
often get bogged down in technological complexity when trying to understand
blockchain, but the basic concept is a simple and universal one. We have facts
and information we don't want accessed, copied, or tampered with, but on the Internet,
there's always a chance it could be hacked or modified. Blockchain gives us a
constant – a bedrock we know won't change once we put something on it and where
a transaction will be verified only if it follows the rules.”
In
July, The Economist reported startup
companies have begun using blockchain to register valuable assets, manage
personal information, and provide ‘truth’ services that ensure research data
integrity. Governments are embracing blockchain applications to manage land
registries and corporate recordkeeping, among other things. Another potential
application for blockchain is maintaining immutable personal data:
“One
of the first things done for a baby could be to give the newborn an entry in a
blockchain, the crypto-equivalent of a birth certificate. This sounds
Orwellian, but it does not have to be. On the contrary, if people’s identity is
anchored in one or several blockchains, this would give them more control over
it and their personal data.”
If blockchain applications are successful, it may become
easier to keep personal data safe online.
Weekly
Focus – Think About It
“I'm not much but I'm all I have.”
--Philip K. Dick,
Author of Martian Time-Slip
Best regards,
Womack
Investment Advisers, Inc.
WOMACK INVESTMENT ADVISERS, INC.
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*
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.
*
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Sources:
http://www.barrons.com/articles/even-hurricanes-cant-kill-off-this-rally-1504929817 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/09-11-17_Barrons-Even_Hurricanes_Cant_Kill_Off_this_Rally-Footnote_6.pdf)
https://www.economist.com/news/world-if/21724906-trust-business-little-noticed-huge-startups-deploying-blockchain-technology-threaten (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/09-11-17_TheEconomist-Disrupting_the_Trust_Business-Footnote_9.pdf)
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