Womack
Weekly Commentary
June 11,
2018
The
Markets
G whiz!
Never before could the Group of 7 (G7) Summit have
been mistaken for reality TV.
The
generally dignified annual meeting of leaders from the United States, Canada,
France, Germany, Italy, Japan, and the United Kingdom (along with the heads of
the European Commission and European Council) was a lot more contentious than
usual, reported Reuters.
Disagreements
about trade were the reason for heightened tensions among world leaders. At the
end of May, the United States extended tariffs on aluminum and steel imports to
U.S. allies. They had previously been exempted. These countries “account for
nearly two-thirds of the [United States’] $3.9 trillion annual merchandise
trade,” reported The Washington Post.
Retaliation
to U.S. sanctions was fast and furious. Mexico implemented “…a 20 percent
tariff on U.S. pork legs and shoulders, apples, and potatoes and 20 to 25
percent duties on types of cheeses and bourbon,” reported Reuters.
Canada
imposed $16.6 billion in tariffs on U.S exports of “…steel and aluminum in
various forms, but also orange juice, maple syrup, whiskey, toilet paper, and a
wide variety of other products,” says Reuters.
The
European Union has a 10-page list of goods targeted for sanctions, including
bourbon and motorcycles, reported The
Washington Post. Complaints that U.S. tariffs are illegal also are being
filed with the World Trade Organization.
Difficult
relationships with allies are “expected to complicate U.S. efforts to confront
China over trade practices that the administration regards as unfair,” reports The Washington Post.
Canadian,
Mexican, and U.S. stock markets remained unfazed. Major indices in each country
moved higher last week. Some American indices reached new highs. European
markets fared less well. Markets may be bouncier this week as investors digest
the costs and benefits of trade sanctions.
Data as of
6/8/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
1.6%
|
3.9%
|
14.2%
|
11.1%
|
10.8%
|
7.4%
|
|
Dow Jones Global ex-U.S.
|
0.8
|
-1.6
|
8.7
|
3.7
|
4.0
|
0.2
|
|
10-year Treasury Note (Yield Only)
|
2.9
|
NA
|
2.2
|
2.4
|
2.2
|
4.0
|
|
Gold (per ounce)
|
0.3
|
0.1
|
2.0
|
3.5
|
-1.3
|
3.8
|
|
Bloomberg Commodity Index
|
-0.5
|
2.1
|
9.5
|
-3.7
|
-7.2
|
-8.6
|
|
DJ Equity All REIT Total
Return Index
|
1.1
|
-1.4
|
3.3
|
7.7
|
8.1
|
7.2
|
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 struggle is real. Millennials are known – and often disparaged – for
being innovators and disrupters. According to Business Insider, the generation has been credited with ‘killing’
everything from starter homes to napkins. There’s a reason for that. Millennials
are the biggest generation and have become the world’s most powerful consumer
group, reports Financial Times:
“The coming of age of the world’s 2bn millennials is not
only a generational shift, it is one of ethnicity and nationality. Forty-three percent
of U.S. millennials are non-white, and millennials in Asia vastly outnumber
those in Europe and the U.S. Despite China’s former one-child policy, it has
400m millennials, more than five times the U.S. figure (and more than the
entire U.S. population) while Morgan Stanley estimates that India’s 410m
millennials will spend $330bn annually by 2020.”
Millennials
have different buying habits and preferences than previous generations. They opt
for access rather than ownership, reports Goldman
Sachs, which has helped fuel the growth of the gig economy’s sharing
services.
As
the first digital natives, Millennials also tend to favor brands that offer the
greatest convenience at the lowest price. The most successful brands have
strong social media presence.
Weekly
Focus – Think About It
“Millennials
are more aware of society's many challenges than previous generations and less
willing to accept maximizing shareholder value as a sufficient goal for their
work. They are looking for a broader social purpose and want to work somewhere
that has such a purpose.”
--Michael
Porter, Harvard Business School Professor
Best
regards,
Womack Investment Advisers, Inc.
WOMACK INVESTMENT ADVISERS, INC.
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Phone (405) 340-1717 - Toll Free (877) 340-1717
Website: www.womackadvisers.com
Womack Investment Advisers, Inc. (WIA) is
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Womack Investment Advisers, Inc. is also registered in the State of California,
the State of Illinois, the State of Indiana, and the State of Texas. WIA only
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exempted from registration requirements.
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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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Sources:
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html (Click on U.S. & Intl Recaps, “Caution sets in”,
then scroll down to the recap chart) (or
go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-11-18_Barrons-Global_Stock_Market_Recap-Footnote_5.pdf)
https://www.ft.com/content/194cd1c8-6583-11e8-a39d-4df188287fff (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/06-11-18_FinancialTimes-How_Millennials_Became_the_Worlds_Most_Powerful_Consumers-Footnote_8.pdf)
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