Womack
Weekly Commentary
November
13, 2017
The
Markets
Selling it overseas.
Most of the companies in the Standard &
Poor’s 500 (S&P 500) Index have reported third quarter earnings per share
(EPS), which is the profit earned per share of stock outstanding during the
period. Many have done quite well.
With more than 90 percent of companies
reporting, the total EPS growth rate for the S&P 500 has exceeded
expectations, reported FactSet. In aggregate,
the growth rate accelerated from 3.1 percent on September 30 to 6.1 percent
last week.
It’s interesting to note companies that sell
more products and services outside the United States experienced significant
increases in EPS when compared to companies that sell more at home. S&P 500
companies with:
·
More than one-half of sales in the United States had an
aggregate growth rate of 2.3 percent.
·
Less than one-half of sales in the United States had an
aggregate growth rate of 13.4 percent.
The disparity owed much to the weaker U.S.
dollar and faster economic growth in other countries, including emerging
markets.
Investors weren’t all that appreciative of
strong corporate performance. They rewarded positive EPS surprises less than
average and penalized negative EPS surprises more than average. On November 10, FactSet explained:
“...it may be due to the high valuation of
the index relative to recent averages. As of today, the forward 12-month P/E [price-to-earnings]
ratio for the S&P 500 is 18.0… Prior to the month of October, the forward
12-month P/E had not been equal to (or above) 18.0 since 2002. Thus, despite
the number and magnitude of positive earnings surprises in recent quarters, the
market may be reluctant to push valuations even higher in aggregate.”
Last week, major U.S.
stock indices ended their multi-week winning streaks and finished lower.
Data as of 11/10/17
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
-0.2%
|
15.3%
|
19.1%
|
8.2%
|
13.4%
|
6.0%
|
|
Dow Jones Global ex-U.S.
|
-0.3
|
21.3
|
23.0
|
4.0
|
5.7
|
-0.5
|
|
10-year Treasury Note (Yield Only)
|
2.4
|
NA
|
2.1
|
2.4
|
1.6
|
4.2
|
|
Gold (per ounce)
|
1.4
|
10.8
|
1.3
|
3.4
|
-5.8
|
4.8
|
|
Bloomberg Commodity Index
|
0.5
|
-0.3
|
4.1
|
-9.2
|
-9.1
|
-7.1
|
|
DJ Equity All REIT Total Return Index
|
2.7
|
9.9
|
17.9
|
8.2
|
11.1
|
7.3
|
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 Winter holidays are almost here. It’s that time of
year when people search and search for just-the-right gifts at
just-the-right-prices for friends and loved ones. The National Retail Federation expects holiday sales to rise by 3.6 percent to 4.0 percent this year and
total about $680 billion. The average consumer expects to spend about $970 on
the holidays. Here are a few gift ideas for the
hard-to-buy-for individuals on your list:
·
For coffee
lovers. It’s an experience shared by coffee drinkers
everywhere. You pour a cup, doctor it up, and before you can take a sip, you are
called away. By the time you return, the coffee is cold. A ceramic mug with a
microprocessor-controlled heating system can solve the problem.
·
For
the outdoorsy. Anyone who spends time in the sun knows the importance
of sunscreen. The mystery is when to reapply it. The outdoorsy folks in your
family may appreciate a UV patch. It’s a wearable decal that changes color when
it’s time to reapply sunscreen.
·
For
the indoorsy. Series bingers and show streamers will love
‘wallpaper’ television. It’s a new kind of TV that viewers ‘peel and stick’ to
their walls using magnetic mats.
·
For
the fashion-conscious environmentalist. Soon, clothing may be made
of synthetic spider silk and bio-manufactured leather. It’s unlikely they’ll be
available this winter, but you could give tickets to the Museum of Modern Art in
New York City. Clothing made of these fabrics is on display through January
2018.
·
For
the insomniac. Know someone who has trouble sleeping? A white noise
machine or an air purifier with a fan can provide constant, soothing sound that
may help lull them to sleep.
·
For
the vision impaired. There are all kinds of gadgets that can
make life a little easier for people with low or no vision. Try a wristband
that shakes to give directions or a new ‘feeling fireworks’ display that simulates
the visual experience through touch.
If you’re stressing because you cannot find
the right gift, remember the best gift is time. Instead of buying things,
invite the people on your gift list to join you for an event or an activity.
“I
slept and I dreamed that life is all joy. I woke and I saw that life is all
service. I served and I saw that service is joy.”
--Kahlil Gibran,
Lebanese writer and poet
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
Are you prepared for the eventual
market volatility?
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*
These views are those of Carson Group 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 Group Coaching. Carson Group 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 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.
*
Stock investing involves risk including loss of principal.
*
Consult your financial professional before making any investment decision.
*
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