Anthony Hubick
David J. Klein
Senior Vice President
Financial Advisor
RBC Wealth Management
847-215-5326
800-879-3246
Fax: 847-215-5315
[email protected]
First Vice President
Branch Director
Private Client Group
Consulting Group
RBC Wealth Management
847-215-5323
800-879-3246
Fax: 847-215-5315
[email protected]
June 12, 2017
"To grasp and hold a vision – that is the very essence of successful leadership”
(Ronald Reagan, 40th US President)
Our Website: www.auctusrbc.com: : Go to our website to register and sign in to your account. If
you have not yet registered, you will find the registration link on the upper left side of the main
page. We have put 3 different articles from RBC on the bulletin board that you should find
interesting.
Professional Money Managers: Who are they? What do they do? Why would we recommend
one to you? What could be special about them? Are they any different from my Financial Advisor?
Isn’t every Advisor a professional money manager? These are questions and thoughts that are often
misunderstood and require further discussion. Please don’t hesitate to ask us these questions!
Key Statistics Year-to-date a/o 6/9/2017
Dow:
S&P 500:
Nasdaq:
+7.64%
+8.62%
+15.32%
Treasury Bond Yields: Current weekly yields a/o 6/9/2017
1-year Treasury:
2-year Treasury:
5-year Treasury:
10-year Treasury:
30-year Treasury:
1.20%
1.35%
1.77%
2.21%
2.86%
--Yields rose across the board last week, but the short-term rates rose slightly more
than the long-term rates.
100-year Bond Review: The following chart depicts very clearly the yield on the long-term
Treasury bond over the past 100 years. While the 100-year average yield is under 5%, the current
yield is just about at historic lows. Treasuries have basically been in a 36-year bull market since
1980 when yields peaked over 13%. As the yield on bonds has come down since 1980, bond values
have risen. The vertical blue lines in the chart indicate periods of recessions.
Markets: (Barron’s, IBD, WSJ, RBC, MFS, IVY)
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For the week: Dow rose +0.31%, S&P 500 fell (-0.30%), Nasdaq fell (-1.55%)
Tech stocks fell after several months of strength
Financials and energy stocks strengthened as tech fell
Global equities showed little change
Oil dropped further to $45.50/barrel
Stock market volatility as measured by the VIX hit a 24-year low when it hit 9.58
Economic News: (Barron’s, IBD, WSJ, RBC, MFS, IVY)
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Gap between job openings and the rate of hiring is at its widest point on record (see chart)
Job opening increased to its highest level since 2000
Employers struggling to hire qualified workers
Businesses seem to be growing at a healthy clip
Jobless claims have been falling – signals labor market strength
Puerto Rico = Illinois: (Source: Investors Business Daily) Puerto Rico has declared bankruptcy.
Illinois was recently downgraded to near junk status, BBB- by Standard & Poor’s and Moody’s
with a negative rating. It is the lowest rating ever for any of the 50 states.
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Both have troubled economies and are deeply in debt
Chilly Illinois and tropical Puerto Rico have one thing in common – bad government
Puerto Rico has lost 2% of its population each year since 2013
Puerto Rico has lost about 400,000 of its 3.4 million population over the past 10 years
Illinois is one of 8 states with a diminishing population – In 2016, 37,508 people fled the
state
Taxes are the #1 reason why people are leaving Illinois
Illinois owes contractors and suppliers a record $14.5 billion
Illinois has $140 billion in unfunded liabilities for government employee pensions
Illinois has operated without a budget for 3 years
“Both have been grossly mismanaged by people operating under the delusion that big
government solves everything. Both overpromised on welfare services, pensions and other
government spending, then tried to raise taxes to pay for it.” (IBD)
International News: (Barron’s, IBD, WSJ, RBC, MFS, IVY)
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Eurozone economy is strengthening
PMI (Purchasing Managers’ index) which measures both manufacturing and services shows
that the Eurozone continues to outperform other developed economies
Eurozone PMI at 56.8, United States at 53.6, UK at 56.7
Question of the Week:
What is a convertible bond? How does it work?
(answer next week)
Question and Answer From Last Week: Which state had the lowest unemployment rate
of any state in April, 2017, and which state had the highest unemployment rate?
Answer: Colorado had the lowest unemployment rate of 2.3% and New Mexico had
the highest unemployment rate of 6.7%.
Did You Know:
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The current economic expansion in the United States will reach 8 years in length as of
6/30/17. No expansion in history has lasted longer than 10 years based upon data that has
been tracked since 1854. (Nat’l. Bureau of Economic Research)
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The top 0.1% of US taxpayers (i.e., top 1 out of every 1,000 taxpayers) paid 19.9% of all
federal income tax for the 2014 tax year. (Internal Revenue Service).
Sports Trivia: It’s Cleveland vs. Golden State for the NBA title for the 3rd consecutive year, the
first time that has happened in NBA history. From 1984-87, the Celtics and the Lakers met in 3 of
4 years. NBA)
Your Referrals: Many sincere thanks for your referrals of family, friends, and associates. We are
deeply appreciative.
Sincerely,
David and Tony
The Auctus Group
www.auctusrbc.com
The views presented here are solely the views and opinions of David Klein and do not reflect the views of RBC Wealth
Management, or its officers and directors. Data is believed to be from reliable sources, but we make no representation
as to its accuracy or completeness.
The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal.
The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues.
The Nasdaq Composite is a market-value The views presented here are solely the views of David Klein, and do not
reflect the views of RBC Wealth Management, or its weighted index that measures all Nasdaq domestic and foreign
common stocks.
The Standard and Poor’s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in
the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility,
and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with
dividends reinvested and is not available for direct investment.
This material is based on data obtained from sources considered to be reliable. However, it is not guaranteed to
accuracy and does not purport to be complete. The illustrations are for informational use only.
RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of
your investments should be made in conjunction with you independent tax or legal advisor.
RBC Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC