Economic Blog
October 18, 2019
U.S. leading economic indicators declined 0.1% in September, following a revised-down 0.2% decline in August.
The Conference Board’s Leading Economic Index (LEI) declined month over month, underwhelming Bloomberg estimates of a flat reading. As shown in the LPL Chart of the Day, the LEI climbed 0.4% year over year. This marks a new low since the 2016 downturn.
Daily Insights
Meandering near highs. The S&P 500 Index is meandering just below record highs, poised for its second week of gains amid trade and geopolitical breakthroughs. Global stocks have risen recently as well, with the Euro Stoxx 50 Index at its highest levels since January 2018 and the Japanese Nikkei near its December 2018 highs. Continue reading
Economic Blog
October 17, 2019
Elevated uncertainty has persisted on Main Street, according to the Federal Reserve’s (Fed) latest Beige Book.
In the Beige Book, the Fed presents qualitative observations made by community bankers and business owners—or “Main Street”—about economic (housing, labor market, manufacturing, nonresidential construction, prices, tourism, wages) and banking conditions (lending conditions, loan demand, loan quality). At LPL Research, we maintain an indicator called the Beige Book Barometer (BBB) to gauge Main Street’s sentiment by looking at how frequently key words and phrases appear in the text.
Daily Insights
Stocks opened higher on Brexit news. Stock futures got a lift early this morning after reports that the U.K. and European Union had reached a Brexit deal (more on that below). U.S. and European stocks are higher on the news, which is helping offset some concerning U.S.-China trade headlines that suggest some risk to the recent “mini-deal.” Continue reading
Daily Insights
Stocks drop. Stocks are down this morning, paring gains after the S&P 500 Index climbed within 1% of a record-high close on October 15. Investors are stepping back amid weaker than expected economic data, increased tensions in the U.S.-China relationship, and pessimistic Brexit Continue reading
Market Blog
October 16, 2019
“History doesn’t repeat itself, but it often rhymes.” — Mark Twain
Stocks have continued their surprising strength in October, thanks to a potential thaw in the U.S.-China trade dispute. And remember, the S&P 500 Index has been lower in October during a pre-election year only once since 1987. Additionally, over the past 20 years, October has been the third-best month on average for the S&P 500. October has had a bad rap due to some spectacular crashes, but the truth is the month usually is pretty good for stocks.
Economic Blog
October 15, 2019
The debate over the United Kingdom’s (U.K.) withdrawal from the European Union (EU), or Brexit, is reaching another milepost in what could be an action-packed week.
Talks between the U.K. government and the EU have entered “tunnel” negotiation mode, in which all details of behind closed doors talks are expected to remain secret until any deal occurs. This negotiation style allows negotiators from both sides to throw around some of the more unusual proposals without fear of political repercussions.
Daily Insights
Earnings season kicks off. U.S. stocks are higher this morning as third quarter earnings season kicks off with a slew of big bank reports. The few reports we’ve seen so far this season have been generally in line with expectations. Overall, we expect to see little if any S&P 500 Index earnings growth for the quarter amid continued trade tensions. Continue reading
Daily Insights
A verbal agreement. Friday, October 11, the U.S. announced that it had reached a verbal agreement with China, concluding two days of face-to-face talks and rampant speculation of a deal in financial markets. Continue reading
Economic Blog
October 11, 2019
Equity markets are rallying on Friday over optimism regarding the U.S.-China trade discussions. President Trump is set to meet this afternoon with Chinese Vice Premier Liu He, and that has many thinking some type of truce or at least a pause in the trade dispute could be in the works.