Market Update: Friday, April 20, 2018

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Daily Insights

  • Leading indicators remains strong. The Leading Economic Index (LEI) jumped 0.3% in March, after being up 0.7% in February and 0.8% in January. This index comprises 10 components (e.g., jobless claims, factory orders, and confidence) to show a picture of future economic health. This is one of Five Forecasters that we use as a warning sign for a pending economic slowdown, and fortunately we see little reason to expect a recession over the next 12 months. Year over year, this index is up +6.2%, well above the negative year-over-year signal that has preceded every recession going back to the early 1970s.

  • Emerging markets under the hood. Emerging markets (EM) are one of our favorite areas to pursue alpha in 2018, as overall economic growth, demographics, valuations, and earnings all may continue to drive equity prices higher. Today on the LPL Research blog, we will take a look at two of the largest components of EM (South Korea and Taiwan) and show: 1) why these influential countries continue to look very strong technically; and 2) how this strength could help EM continue to outperform.

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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.

Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. 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.

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.

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