September 12, 2017
Storms, Sports & Stocks
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.
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.
Are You Protecting Your 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
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management
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.
- 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.
- 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.
- 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.
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)
IRS Circular 230 Disclosure: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter.
ADV & Investment Objectives: Please contact The Dowling Group if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.
It's a busy world. Our newsletter helps keep you tuned in to major market events, money-saving opportunities, filing deadlines, and other important information. One email per week and no spam — promise.Subscribe