Market Update: Thursday, August 11, 2016


  • 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)



  • Japan: GDP (Q2)

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