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    Markets "In a Nutshell" for June 12, 2018

    Jun 12, 2018

    Investment Week at a Glance

    Stocks were up last week. The Dow Jones Industrial average shot up 2.8%. The S&P 500 rose 1.6% while the New York Stock Exchange Composite (2,000 stocks) was up 1.7%. The “average investor’s index” (Value Line index) increased 2.2% and foreign stocks (DJ Global ex U.S.) gained 0.8%. Bond yields were on the move up with the 10 year Treasury yield ending at 2.93%. (Data sources: Barron’s Financial, Wall Street Journal)

     

    U.S. has more jobs than jobless

    For the first time since keeping this particular statistic, there are more jobs available in the U.S. than those out of work. The Labor Dept. reported that at the end of April there were 6.7 million job openings while 6.3 million people were unemployed. These numbers are consistent with the declining unemployment rate which declined to 3.8% in May. The great job numbers look to push workers wages up which can further boost economic growth. 

     

    Value investors giving up?

    According to the Wall Street Journal (6/5/18), value investing (those who hunt for bargain priced stocks) has been out of favor for so long that some value investors are moving outside their boundaries and buying high flying tech stocks. Stock sectors such as consumer staples (ie Kraft Foods, Proctor-Gamble) basic materials (metals, mining, forestry) and manufacturing (U.S. Steel, John Deere) have struggled with performance and the fear of lagging performance has driven some money managers to high flying tech stocks.

     

    Fear not rising interest rates?

    Northern Trust CIO Bob Brown says fear not rising interest rates. In a Barron’s article (6/5/18) Brown sees the U.S. in a new era, one where the Federal Reserve does not raise rates much more from current levels. From Brown’s perspective low rates will foster moderate economic growth and keep bonds and stock attractive.

     

    Quiz:

    The 10 year U.S. Treasury Note has pushed above a 3% yield in recent weeks. In what year did the 10 year note hit its all time low of 1.36%? a. 1933 b. 1973 c. 1982 d. 2016...Answer is below…

     

    Have a good week!

     

     

     

     

    Answer to quiz:

    d. 2016