- Equities and oil jump. U.S. averages are rebounding this morning as department store earnings give markets a boost; Macy’s and Kohl’s reported well-received results this morning, while Nordstrom is set to report after the closing bell. Yesterday’s decline was paced by energy and financials, which followed oil lower on an unexpected build in inventories. In Asia, the Shanghai Composite lost 0.5% after speculation of additional monetary easing was dampened by the central bank of China, while the Nikkei was closed for Japan’s newest holiday: Mountain Day. European shares are modestly higher this afternoon after starting Thursday’s session in the red amid mixed earnings reports. Meanwhile, the yield on the 10-year Treasury note has ticked up to 1.52%, COMEX gold is flat, and WTI crude oil is back above $43/barrel.
- Initial claims remain low. At 266,000, new claims for unemployment insurance remained at 40-year lows in the week ending August 6, 2016, another reminder that the labor market post-Brexit is little changed from pre-Brexit. But as usual, the weekly claims data are beset by distortions. At this time of the year, the end of the quarter/start of a new quarter and the annual auto plant shutdowns are the likely culprits. Claims are up 7,000 from their level 26 weeks ago. In the past, claims need to rise more than 75,000 over a six-month (26-week) period to indicate a recession, so there is no recession signal from claims.
- 100 days left in 2016. Yesterday marked 100 trading days left in 2016. With the S&P 500 up 6.4% for the year, this could be a good sign. Going back to 1928, the S&P 500 has been positive 56 times with 100 trading days left in the year. For the rest of the year, the average return has been a gain of 4.2%, and higher 84% of the time. Compare that with the 28 times the S&P 500 was negative year to date with 100 days to go. The average return the rest of the year in that scenario drops down to -2.3%, and higher only 43% of the time. Today on the LPL Research blog we will take a closer look at this phenomenon. We also examine how meaningful it could be that the S&P 500 is up a solid 6.4% in 2016, more than the average year.
- South Korea: Central Bank Meeting (No Change Expected)
- China: Industrial Production (Jul)
- China: Retail Sales (Jul)
- China: Fixed Asset Investment (Jul)
Click Here for our detailed Weekly Economic Calendar
Past performance is no guarantee of future results.
The economic forecasts set forth in the presentation may not develop as predicted.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
Stock investing involves risk including loss of principal.
Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
Treasury Inflation-Protected Securities (TIPS) are subject to interest rate risk and opportunity risk. If interest rates rise, the value of your bond on the secondary market will likely fall. In periods of no or low inflation, other investments, including other Treasury bonds, may perform better.
Bank loans are loans issued by below investment-grade companies for short-term funding purposes with higher yield than short-term debt and involve risk.
Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.
Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards.
High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors.
Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply.
Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.
Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.
Technical Analysis is a methodology for evaluating securities based on statistics generated by market activity, such as past prices, volume and momentum, and is not intended to be used as the sole mechanism for trading decisions. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns and trends. Technical analysis carries inherent risk, chief amongst which is that past performance is not indicative of future results. Technical Analysis should be used in conjunction with Fundamental Analysis within the decision making process and shall include but not be limited to the following considerations: investment thesis, suitability, expected time horizon, and operational factors, such as trading costs are examples.
This research material has been prepared by LPL Financial LLC.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit
Securities and Advisory services offered through LPL Financial LLC, a Registered Investment Advisor
Tracking # 1-524139