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    Markets "In a Nutshell" for March 6, 2018

    Mar 06, 2018

    Investment Week at a Glance

    Stocks declined last week. The Dow Jones Industrial average dropped 3.1% while the S&P 500 fell 2.0%. The New York Stock Exchange Composite (2,000 stocks) declined 2.5% and the “average investor’s index” (Value Line index) was down 1.6%. Foreign stocks (DJ Global ex U.S.) dropped 2.8% and interest rates moved higher last week as the 10 year Treasury yield ended at 2.86%. (Data sources: Barron’s Financial, Wall Street Journal)

     

    Global trade war coming?

    The Trump administration fired what could the first shot in a global trade war by imposing tariffs on steel and aluminum imports. While good for steel and aluminum domestic producers (as witnessed by the sharp increases in those companies stocks on Thursday) trade wars are usually not healthy for economies or stocks markets. According to Datatrek Research technology stocks would be particularly vulnerable to a trade war (in which countries impose tariffs upon one another) because 60% of their revenues are foreign driven. Now before we rush out and sell our tech stocks, it may well be the case that the global tariff threat will end quickly as a trade resolution is negotiated. We will have to wait and see.

     

    Dividends on the rise

    According to the Wall Street Journal (2/28/18) more than one-fifth of companies in the S&P 500 have raised dividends this year while no firms have cut. The average dividend hike is 14%, best since 2014 and is a boon for dividend stock investors. Dividends from stocks can be a cushion against price losses during market drops. While less in recent years, over time dividends can account for upwards of 40%-50% of stock total returns.

     

    Baseball card prices trounce S&P 500 returns

    A new trading card index, the PWCC top 500, shows that the top 500 trading cards (many are baseball cards) have increased in price by 150% the past 10 years vs. S&P 500 stock index returns of 92%. In the trading card index are such cards as a 1956 Topps Mickey Mantle in gem mint condition that sold for $360,000 in 2017 and a 1916 Sporting News Babe Ruth card in very good- excellent condition for $95,000.  It may be a good time to scour your attic (or that of a parent or grandparent). Perhaps there is a box of old baseball cards awaiting discovery.

     

    Quiz:

    We talk above of the increase in baseball card prices the past 10 years. In 2016 a 1910 Honus Wagner baseball card sold for which of the following record amount?  a. $475,000 b. $890,000 c. $1.4 million d. $2.3 million e. $3.1 million...Answer is below…

     

    Have a good week!

     

     

     

     

    Answer to quiz:

    e. Yep, $3.1 million. The highest price paid yet for a baseball card.