Economic Blog
U.S. leading indicators rebounded in July, a good sign for the durability of the expansion.
The Conference Board’s Leading Economic Index (LEI) rose 0.5% month over month, the biggest gain since September 2018, and above consensus expectations for a 0.3% increase. As shown in the LPL Chart of the Day, Leading Indicators Slowing But Growing, the LEI climbed 1.6% year over year. Continue reading
Daily Insights
Jackson Hole. Today, policymakers are scheduled to kick off the Federal Reserve’s (Fed) annual Economic Policy Symposium in Jackson Hole, WY. During the conference, Fed Chair Jerome Powell and other Fed members are expected to speak on the future of U.S. monetary policy, a sensitive topic for markets right now. Continue reading
Economic Blog
Minutes from the Federal Reserve’s (Fed) July meeting, released August 21, show the complexity of policymakers’ discussions leading up to the first rate cut of this economic cycle.
Policymakers debated what to do amid strong consumer spending, a solid labor market, tepid inflation, sluggish business investment, financial stability, global risks, and the persistent headwind of trade uncertainty. Ultimately, the Fed announced a 25 basis point (0.25%) rate reduction after a vote with two dissents (Fed presidents Esther George from Kansas City and Eric Rosengren from Boston).
Daily Insights
Stocks’ resiliency. U.S. stocks have been resilient this week, with the S&P 500 Index climbing 1.2% through Wednesday’s close amid light volumes. Stock investors barely flinched after minutes from the Federal Reserve’s (Fed) July meeting were released Wednesday, even as the spread between the 2-year and 10-year U.S. Treasury yields dipped below zero in trading. Continue reading
Market Blog
Growth stocks have had an unprecedented run of outperformance compared with value stocks for over a decade now. Strong performance has left valuations at extremes, which we used to support our slight preference for value stocks in late 2018 and into 2019. Our economic and interest rate outlooks also pointed to value.
The tide has turned, however.
Daily Insights
Another quiet day. Global stocks are trending higher on another light day for headlines and data. It’s quiet right now, but that will likely change in the next few days as investors parse through minutes from the Federal Reserve’s (Fed) July meeting and data on global manufacturing health. Continue reading
Economic Blog
Trade tensions continue to weigh on China’s growth, creating added pressure to reach a trade deal with the United States.
Economic reports released last week provided further confirmation that the trade war is continuing to affect the Chinese economy. As shown in the LPL Chart of the Day, Industrial Production Weakening in China, U.S., China’s manufacturing increased just 4.8%, the slowest rate of growth in 17 years. Although that rate of manufacturing growth exceeds that of the United States, it represents a sharp slowdown for China.
Daily Insights
Stocks take a breather. Global stocks are taking a breather this morning after two days of impressive performance. The S&P 500 Index has jumped 2.7% over the past two trading sessions, posting its first back-to-back 1% gains in nine months. Continue reading
Daily Insights
Solid earnings considering the stiff headwinds. With only about 30 S&P 500 Index companies left to report results, second quarter 2019 earnings for the index are tracking down 0.7% year over year according to FactSet, above June 30, 2019, estimates (-2.7%) despite a 1.5 percentage point drag from Boeing. Continue reading
Economic Blog
U.S. economic data has been sound this week, providing investors with good news amid a wave of conflicting headlines and market volatility.
Second quarter nonfarm productivity, released August 15, was an especially encouraging report. As shown in the LPL Chart of the Day, Nonfarm Productivity Picks Up, nonfarm productivity climbed 2.3% in the second quarter and 1.8% year over year.