Market Update: Friday, August 10, 2018

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Daily Insights

  • LPL Research on CNBC. In case you missed it, LPL Research Senior Market Strategist Ryan Detrick was on CNBC’s Trading Nation yesterday talking about the S&P 500’s four-month winning streak. View the interview here.

  • Turkish lira sinks to a record low. The Turkish lira fell more than 10% vs. the U.S. dollar amid fears of economic turmoil in Turkey after the U.S. imposed sanctions on Turkey last week. President Trump also announced this morning that the U.S. will double steel and aluminum tariffs on Turkey, escalating tensions further. Global stocks dropped on the news. European stocks fell about 2% intraday, heading for their worst day since May. Geopolitical tensions have been a source of volatility for U.S. stocks this year, so any new developments could periodically weigh on the S&P 500 Index.

  • Streaks. The Nasdaq gained again, up 8 days in a row for the first time since a 9-day win streak last September/October. The all-time record is an incredible 19 days in a row back in 1979. The lull continued for the S&P 500 Index, which now hasn’t traded in an intraday range greater than 0.4% for three consecutive days. This is the first time that has happened in 2018 (it happened multiple times in a historically non-volatile 2017). To put things in perspective, there have been 153 trading days this year and the past three days have ranked first, third, and eighth smallest in their intraday ranges.

  • CPI longer-term trend shows inflation rising. The consumer price index (CPI) rose 0.2% in July from the prior month, matching consensus expectations. Excluding food and energy, CPI rose 0.2% in the month, also in line with consensus estimates. While the month-over-month gain in consumer prices was relatively muted, the longer-term trend shows inflation rising. CPI climbed 2.9% year over year in July, its biggest annual gain since February 2012 and matching consensus estimates. Excluding food and energy, CPI jumped 2.4% year-over-year, the fastest pace of the current economic cycle and above consensus expectations for a 2.3% increase. Yesterday, a report showed the producer price index (PPI) remained unchanged month over month in July. However, year over year growth for intermediate goods, which are sold to businesses to be used in production, is at its fastest pace since November 2011, indicating pricing pressures beneath the surface. We believe price and wage growth are still manageable. However, we’ll continue to monitor economic reports for any signs that the U.S. economy is overheating.

  • LPL Advisors’ Top Tweets. We are pleased to share LPL Advisors’ top tweets from July on today’s LPL Research Blog. We are grateful for all the terrific engagement with advisors on social; please join us via @LPLResearch.

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Click Here for our detailed Weekly Economic Calendar

Friday

  • CPI MoM (Jul)
  • CPI YoY (Jul)
  • CPI Ex Food & Energy MoM
  • CPI Ex Food & Energy YoY
  • France: Industrial Production (Jun)
  • UK: Industrial Production (Jun)
  • UK: GDP (Jun)

 

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.

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All performance referenced is historical and is no guarantee of future results.

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Index data obtained via FactSet

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