Market Update: Wednesday, March 28, 2018

MacroView_header

Daily Insights

  • Still a lot to like about tech. The technology sector may remain volatile around internet privacy issues and valuation concerns, and while we pared exposure in many of our portfolios in recent months, we still see a lot to like. Recent weakness has brought the sector’s relative valuations down to a reasonable premium (<10%) versus the S&P 500 Index on a forward price-to-earnings ratio basis, aided by strong earnings growth–consensus is calling for a 23% year-over-year increase for the first quarter and 18% for 2018 (Thomson Reuters data). In addition, repatriation will enable the sector to put its massive cash hoards to work. From a technical analysis perspective, sometimes the best-performing groups correct last, so the latest downdraft in technology may actually be an indication that the stock market correction that began in late January is running its course.

  • Final read on fourth quarter GDP revised higher. The third and final estimate of fourth quarter U.S. gross domestic product (GDP) was upwardly revised by 0.4% to a 2.9% annualized rate, beating consensus estimates (2.5%). Surging imports (+0.1% to +14.0%) continued to drag on growth but was offset primarily by 4.0% growth in consumer spending (+0.2% from prior estimate). And while three months of declining retail sales suggest consumers’ support could wane modestly in the first quarter data, recently passed fiscal stimulus may still propel the economy to grow by at least 3.0% this year.

  • Time for April showers? We generally have to put up with a rainy April to enjoy beautiful flowers in May. That begs the question: Will it rain on the bulls this April? We’ll discuss the likelihood on the LPL Research blog later today.

MonitoringWeek_header

Click Here for our detailed Weekly Economic Calendar

Wednesday

  • MBA Mortgage Applications (Mar 23)
  • GDP (Q4)
  • Advance Goods Trade Balance (Feb)
  • Wholesale Inventories (Feb)
  • Retail Inventories (Feb)
  • Pending Home Sales (Feb)
  • Germany: Consumer Confidence (Apr)
  • France: Consumer Confidence (Mar)
  • Italy: Industrial Sales & Orders (Jan)
  • UK: Consumer Confidence (Mar)
  • UK: Lloyds Business Barometer (Mar)
  • China BOP: Current Account Balance (Q4)
  • Japan: Retail Sales (Feb)

Thursday

Friday

 

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

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.

The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured.  These products are not Bank/Credit Union obligations and are not endorsed, recommended or guaranteed by any Bank/Credit Union or any government agency.  The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

Member FINRA/SIPC

For Public Use – Tracking # 1-714288 (Exp. 3/19)