The Markets

If you found holiday songs or Beatles tunes humming through your head last week, it may have been your subconscious processing world and market events.

Over the river and through the woods/To Grandmother’s house we go . . .Janet Yellen, current Vice Chairman and nominee to be the next Chairman of the Federal Reserve System, testified at her confirmation hearing before the U.S. Senate’s Committee on Banking, Housing, and Urban Affairs on Thursday. Her comments were widely interpreted as indicating that current stimulus measures will remain in place. This made investors happy and helped push global stock markets higher.

In the United States, the Dow Jones, S&P 500, and NASDAQ, all appear to be headed toward milestones. The Dow is nearing 16,000, the S&P is closing in on 1,800, and the NASDAQ is approaching 4,000.

You say you want a revolution/Well you know/We all want to change the world… China’s third plenum of the 18th Central Committee, which also is being referred to as a blueprint for reform, a reform manifesto, and the Decision on Major Issues Concerning Comprehensively Deepening Reforms, is ambiguously phrased, according to The Economist. However, it appears to encourage:

“…Experimentation in everything from trading rural land to the freeing of controls on interest rates. Barriers to migration will be further broken down and the one-child policy relaxed. A widely resented system of extra-judicial detention, known as laojiao (re-education through labor), will be scrapped.”

China’s leaders also promised to elevate the role of markets in the economy. That news helped push Shanghai Composite Index higher last week.

Data as of 11/15/13

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor’s 500 (Domestic Stocks)

1.6%

26.1%

32.9%

14.5%

16.2%

5.6%

10-year Treasury Note (Yield Only)

2.7

NA

1.6

2.9

3.7

4.2

Gold (per ounce)

0.1

-24.0

-24.7

-2.0

11.9

12.6

DJ-UBS Commodity Index

0.0

-11.4

-12.4

-6.1

0.0

-0.4

DJ Equity All REIT TR Index

1.3

5.0

12.9

12.0

21.9

9.3

Notes: S&P 500, 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 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.

Best regards,

“Jonathan K. DeYoe

P.S.  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. 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. 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.

Sources:

http://www.reuters.com/article/2013/11/15/us-markets-global-idUSBRE96S00E20131115

http://www.usatoday.com/story/money/markets/2013/11/17/stock-market-in-milestone-heaven/3576739/

http://www.economist.com/news/china/21589869-communist-party-calls-wide-ranging-economic-reforms-and-gives-itself-new-tools-implement

http://www.economist.com/blogs/analects/2013/11/reform-china

http://www.bloomberg.com/news/2013-11-15/china-s-stock-index-futures-rise-as-oil-refiners-may-move.html

http://www.investopedia.com/terms/d/definedbenefitpensionplan.asp

http://ww2.cfo.com/retirement-plans/2013/04/the-great-pension-derisking/

http://www.reuters.com/article/2013/04/07/us-corporate-pensions-wilshire-idUSBRE9360CC20130407

http://www.marketwatch.com/story/more-us-companies-formalizing-plans-to-de-risk-defined-benefit-pension-plans-towers-watson-survey-finds-2013-11-12?reflink=MW_news_stmp

http://www.ehd.org/science_technology_largenumbers.php

http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/11-18-13_CFO_Research_and_Mercer-Evolving_Pension_Risk_Strategies-June_2013.pdf

http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=5283

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