Market Update: Wednesday, April 5, 2017


  • Stocks gain in early trading. (9:54am ET) U.S. equities are moving up this morning, with the political landscape continuing to be at the forefront of investors’ minds. President Donald Trump and Chinese President Xi Jinping will meet this week, while North Korea conducted another missile test early Wednesday morning. The S&P 500 closed up 0.1% yesterday; with the exception of energy (+0.7%), no sector moved more than half a percent. Stocks in Asia were mostly higher overnight; Japan’s Nikkei moved up 0.3% while the Shanghai Composite gained 1.5%. European equities are clinging to modest gains following the release of Purchasing Managers’ Index (PMI) data and early strength in the U.S., the STOXX Europe 600 is up 0.2% late in the session. Finally, WTI crude oil is up 1.3% to $51.69/barrel after the American Petroleum Institute’s (API) report showed a drawdown in inventories, COMEX gold ($1248/oz.) is falling, and the yield on the 10-year Treasury is up 2 basis points (0.02%) at 2.36%.


  • ADP employment report points to another strong month of job growth. ADP, the nation’s largest payroll processing firm, estimated the economy added 263,000 new jobs in March, well ahead of consensus estimates of 185,000, a meaningful beat even after taking into account a substantial downward revision to February’s job count from 298,000 to 254,000. While the report augurs well for Friday’s government employment report, a change in ADP’s methodology, which now includes forecasts based on public economic data in addition to using ADP’s proprietary database of payroll data, has made the report a less reliable preview. Areas of strength indicated in the report included construction, manufacturing, and small business hiring, a positive sign that a recent surge in business confidence may be flowing through to hiring decisions. Estimates for Friday’s jobs report stand at non-farm payroll growth of 178,000 and the unemployment rate holding steady at 4.7%.
  • Busy day for Fed news. Richmond Federal Reserve (Fed) President Jeffrey Lacker made news yesterday, announcing his immediate resignation following an admission that he discussed confidential information with an analyst in 2012. This news, though disturbing, isn’t likely to have much of an impact on the balance of power within the Fed, as Lacker was not a voting member of the Federal Open Market Committee (FOMC) this year, and had already announced his intention to retire in October. Though Lacker’s resignation has taken precedence in the media, markets are also looking forward to gaining more insight on the Fed’s decision to raise interest rates at its policy meeting last month with the release of the FOMC meeting minutes today at 2 pm ET.
  • Make that 100. The S&P 500 has officially closed above its 50-day moving average for 100 consecutive trading days. That is the longest streak in more than six years and only the 18th time it has ever happened going back to 1928[1]. The most recent streak, prior to yesterday’s, ended in March 2011 at 130 days. The all-time record above the 50-day was 257 trading days in 1995 and 1996. What does it mean? Today on the LPL Research blog we take a look at what happens historically to the S&P 500 after these long streaks.

[1] Please note: The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1928 incorporates the performance of predecessor index, the S&P 90.


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  • ISM Non-Mfg. (Mar)
  • Eurozone: Markit Services & Composite PMI




Important Disclosures

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.

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