When in doubt, blame it on the weather.
It’s human nature to want to ascribe a reason to everything that happens in the world. Rather than feeling like it’s all random, we always want to know why the market went up or why bats hang upside down or why white is the most popular car color.
And, last week’s employment report is no different. The government said the economy added 120,000 new jobs in March, however, that was well below the 210,000 increase expected by economists surveyed by MarketWatch. So, to what did some economists attribute the smaller than expected increase? You guessed it, the weather!
Unseasonably warm winter weather in many parts of the country may have disrupted the normal winter hiring pattern. According to MarketWatch, “Companies kept workers on or hired people in January and February who otherwise would have been added in March or April.”
In addition to hiring, weather was also a key driver behind recent strong retail sales. Bloomberg reported that, “Retailers are benefiting from warm weather that boosted demand for spring products…”
Over time, the effects from weather will likely even out so there’s no need for us to add a meteorologist to the team. But, just so you know, it’s not always dollars and cents behind changes in the markets. Sometimes you just have to stand outside and check out the weather.
|Data as of 4/5/12||1-Week||Y-T-D||1-Year||3-Year||5-Year||10-Year|
|Standard & Poor’s 500 (Domestic Stocks)||-0.7%||11.2%||4.8%||18.7%||-0.6%||2.2%|
|DJ Global ex US (Foreign Stocks)||-2.3||8.4||-12.7||13.6||-4.7||5.1|
|10-year Treasury Note (Yield Only)||2.2||N/A||3.5||2.9||4.7||5.2|
|Gold (per ounce)||-1.9||3.6||13.8||23.3||19.4||18.4|
|DJ-UBS Commodity Index||-0.2||0.7||-17.3||8.2||-4.0||3.7|
|DJ Equity All REIT TR Index||-1.1||9.2||9.9||35.1||-0.6||10.1|
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS 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 TR 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
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.
Weekly Focus – Think About It
“Rules for Happiness: something to do, someone to love, something to hope for.”
-Immanuel Kant, German philosopher
- This newsletter was prepared by PEAK.
- The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
- The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.
- 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 London afternoon gold price fix as reported by the London Bullion Market Association.
- The DJ 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 TR 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.
- Past performance does not guarantee future results.
- You cannot invest directly in an index.
- Consult your financial professional before making any investment decision.