all-time highMissed it by THAT much! After a rocky start, the Standard & Poor’s 500 Index came within 1 percent of an all-time high last week, reported Ben Levisohn for Barron’s. It’s significant because the Standard & Poor’s 500 Index has been trading below its January record all year. The article suggested the lack of progress begs the question: Are we still in a bull market?

It’s the old ‘Shrink Global Markets with Corporate Buybacks’ trick. Last week, Robin Wigglesworth of Financial Times reported, “The global equity market is shrinking at the fastest pace in at least two decades, as a wave of corporate share buybacks swamps the overall volume of companies going public, issuing new stock or selling convertible debt.”

The value of the global equity market is increasing despite the reduction in volume. In part, this is because stock buybacks help push share prices higher.

There is a potential downside to buybacks, though. Nasdaq.com explained, “…rewarding current shareholders so liberally can lead to a systemic extraction of value from companies on a macroeconomic scale. Throw in dividends and little is left for growth and expansion.”

Would you believe…the President asked for it? “President Trump on Friday asked regulators to review a decades-old requirement that public companies release earnings quarterly, a change some executives support to promote longer-term planning but that some investors worry could reduce market transparency,” reported Dave Michaels, Michael Rapoport, and Jennifer Maloney of The Wall Street Journal.

While transparency is essential to investors, critics suggest quarterly reporting “distracts companies from focusing on longer-term financial and strategic goals and may deter companies from going public,” wrote Andrew Edgecliffe-Johnson and Mamta Badkar for Financial Times.

Stay tuned.

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* These are the general views of Jonathan DeYoe and they should not be construed as investment advice for any individual.

* 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 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.

* The original “Weekly Commentary” was prepared by Peak Advisor Alliance. Jonathan DeYoe is a member of Peak Advisor Alliance and adds, subtracts and edits before publishing.

* 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.

* “As Maxwell Smart Used to Say…”

Sources:

https://www.npr.org/templates/story/story.php?storyId=4865354
https://www.barrons.com/articles/will-jpmorgan-tank-when-jamie-dimon-leaves-1534433537 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-20-18_Barrons-The_Bull_Market_Rumbles_On_Despite_Turkey_Turmoil-Footnote_2.pdf)
https://www.ft.com/content/5a359796-a18e-11e8-85da-eeb7a9ce36e4 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-20-18_FinancialTimes-Global_Equity_Market_Shrinks_as_Buybacks_Surge-Footnote_3.pdf)
https://www.nasdaq.com/article/stock-buybacks-poised-to-eclipse-1-trillion-cm1006412
https://www.wsj.com/articles/trump-directs-sec-to-study-six-month-reporting-for-public-companies-1534507058 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-20-18_WSJ-Trump_Asks_SEC_to_Study_Six-Month_Reporting_for_Public_Companies-Footnote_5.pdf)
https://www.ft.com/content/c1d133aa-a211-11e8-85da-eeb7a9ce36e4 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-20-18_FinancialTimes-Trump_Asks_SEC_to_Study_Scrapping_Quarterly_Earnings_Reports-Footnote_6.pdf)