Market Update: Wednesday, August 15, 2018

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Daily Insights

  • Retail sales gain for a sixth consecutive month. U.S. retail sales increased 0.5% in July, posting sixth straight months of growth for the first time since 2014 and handily beating consensus estimates (0.1%). Excluding automobiles and gas, sales rose 0.6%. Consistent growth in retail sales reflects the health of the U.S. consumer, emboldened by fiscal stimulus implemented earlier this year. Control-group sales, which are used to calculate gross domestic product, increased 0.5%, above consensus expectations for a 0.4% gain, pointing to another strong quarter of economic growth.

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Market Update: Tuesday, August 14, 2018

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Daily Insights

  • Fixed income sentiment and inflation. Shorter-term breakeven inflation rates have dropped to their lowest levels of the year, implying market expectations for persistent inflation continue to dwindle. Today on the LPL Research blog, we analyze fixed income’s tempered reaction to recent inflation data, which has weighed on longer-term rates.

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Market Update: Monday, August 13, 2018

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Daily Insights

  • Impressive earnings season enters final stretch. With more than 90% of S&P 500 Index companies having reported second quarter results, year-over-year earnings growth for the index is tracking to an impressive +24.4%, nearly 4% above expectations as of June 30. Also impressive, revenue growth is tracking to +9.3%, an unusually large 1%-plus upside surprise. Beat rates for earnings and revenue are both well above long-term averages at 79% and 71%. Finally, also impressive, forward four quarter estimates have risen 0.6% during reporting season, breaking the historical pattern of declines and suggesting tariffs have had little broad impact on companies’ outlooks. This week company reports tail off with just 14 S&P 500 companies due to report.

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Weekly Update 8/10/2018 – Indexes Falter Late in Week as Dollar Surges

US: S&P 500 Index -0.28%, Dow -0.58%, Nasdaq +0.34%
Europe: STOXX Europe 600 -0.9%, German DAX -1.5%, France CAC 40 -2.6%, U.K. FTSE 100 -1.7%
Asia: Japan Nikkei -1.0%, China Shanghai Composite +2.0%, Korea KOSPI  -0.2%
Rates/Commodities: 10-Year Treasury yield -9 basis points to 2.86%, WTI crude oil -1.1%, COMEX gold -0.3%

Global markets moved lower this week, as overseas turmoil on Friday erased the week’s earlier gains. Continue reading

Market Update: Thursday, August 9, 2018

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Daily Insights

  • More sanctions for Russia. The U.S. announced new sanctions on Russia in response to the Russian government’s involvement in a March 4 chemical attack. The sanctions, expected to take effect on August 22, limit U.S. exports to Russia that could be used for military purposes, according to news reports. Russia then threatened to retaliate in response to the new sanctions, driving the ruble to its lowest point since 2016 vs. the U.S. dollar. While these latest sanctions would be a small drop in a bucket in the context of trade discussions, any geopolitical headlines could inject volatility into the stock market.

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