Market Update: Tuesday, August 14, 2018


Daily Insights

  • Fixed income sentiment and inflation. Shorter-term breakeven inflation rates have dropped to their lowest levels of the year, implying market expectations for persistent inflation continue to dwindle. Today on the LPL Research blog, we analyze fixed income’s tempered reaction to recent inflation data, which has weighed on longer-term rates.

  • Turkey tension has subsided…for now. Japanese stocks rallied and European stocks were slightly higher as headlines in the U.S.-Turkey conflict abated. The S&P 500 Index also opened higher on the day, signaling U.S. stocks may be able to snap a four-day losing streak (the S&P 500’s first since March). We continue to believe Turkey’s market turmoil is contained, and any risk of contagion to the U.S. economy or markets is minimal. However, any new developments could inject daily volatility into U.S. stocks.

  • Small businesses most optimistic since the 1980s. The NFIB Small Business Optimism Index rose to 107.9 in July, its highest reading since hitting 108.0 in September 1983. Survey respondents noted higher sales over the past three months, and 35% expect better future business conditions. However, a record 37% of respondents reported job openings they could not fill, while the majority reported few or no qualified applicants for the positions they were trying to fill. The latest survey shows that fiscal stimulus has emboldened small businesses in the U.S. even amid rising input costs from tariffs, a trend that could provide a boost to third-quarter gross domestic product (GDP). However, a skill mismatch between job searchers and employers is still obstructing hiring for U.S. firms of all sizes.

  • Eurozone GDP revised higher. Second-quarter GDP growth in the Eurozone was revised up to 0.4%, boosting year-over-year GDP growth to 2.2%. The upward revision was encouraging, but growth in the Eurozone remains modest. We still believe the U.S. and emerging markets (EM) will deliver stronger economic growth and earnings growth than the Eurozone, and that the U.S. and EM will lead global economic growth this year.*


Click Here for our detailed Weekly Economic Calendar


  • Germany: GDP (Q2)
  • Germany: CPI (Jul)
  • France: CPI (Jul)
  • UK: Jobless Claims & Unemployment Rate (Jul)
  • Eurozone: Industrial Production (Jun)
  • Eurozone: GDP (Q2)
  • Japan: Industrial Production (Jun)


  • Retail Sales Advance MoM (Jul)
  • Industrial Production (Jul)
  • UK: CPI & PPI (Jul)
  • UK: Retail Price Index (Jul)





*Additional descriptions and disclosures are available in the Midyear Outlook 2018: The Plot Thickens publication

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 company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

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.

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

This research material has been prepared by LPL Financial LLC.

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Index data obtained via FactSet


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