Economic Slowdown Evident But Not Flashing Red

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.

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Market Update: Fri, Oct 18, 2019 | LPL Financial Research

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

Uncertainty Persists on Main Street

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.

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Market Update: Thurs, Oct 17, 2019 | LPL Financial Research

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

The Calendar Could Have Bulls Smiling

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.

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Light at the End of the Brexit Tunnel

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.

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Market Update: Tues, Oct 15, 2019 | LPL Financial Research

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