Market Update: Wednesday, August 22, 2018

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Daily Insights

  • The longest bull market ever. The bull market that started back in March 2009 is now officially the oldest bull market ever – topping the duration of the bull from the 1990s. While there are some valid arguments to counter the claim that this is really the longest bull market ever, we’re taking this chance to reflect on the S&P 500 Index’s impressive performance. Investors have shown conviction in U.S. stocks since the lows more than nine years ago, focusing on the growth of corporate profits and the economic recovery to sustain the bull market. On today’s LPL Research blog, we explore the current state of this 113-month bull market (compared to bull markets of the past) and explain why the S&P 500 Index’s rally may still have fuel left in the tank.

  • FOMC meeting minutes. Investors are looking forward to today’s release of minutes from the Federal Open Market Committee’s (FOMC) last meeting, which ended August 1. While the group decided to keep interest rates unchanged at that meeting, the minutes will likely provide more context around what the FOMC considers as a neutral level for rates given its outlook on the economy and inflation. It is important to remember that the last meeting occurred before Turkey’s currency crisis escalated, so policymakers’ thoughts on the global economy won’t reflect these recent developments. The Federal Reserve’s (Fed) annual Economic Symposium in Jackson Hole, Wyoming also starts on Thursday, so Fed Chair Jerome Powell’s comments at that event could reflect on the global situation and supplement any clues gathered from the minutes.

  • Political headlines increase uncertainty. Major U.S. indexes opened near flat this morning as investors process the uncertainty from a slew of political headlines released late yesterday afternoon. Michael Cohen, President Trump’s former personal lawyer, pled guilty to illegal campaign finance charges, while Paul Manafort, President Trump’s former campaign chairman, was convicted on eight counts of bank and tax fraud. We don’t think these latest developments will have any impact on the economic recovery or corporate profits. However, this latest news could spur more political fallout, a sensitive topic for financial markets recently.

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Click Here for our detailed Weekly Economic Calendar

Wednesday

  • Existing Home Sales (Jul)
  • Fed: FOMC Meeting Minutes
  • Japan: All Industry Activity Index (Jun)
  • Japan: Nikkei Mfg PMI (Aug)

Thursday

  • Markit Mfg PMI (Aug)
  • New Home Sales (Jul)
  • France: Markit Mfg & Svcs PMI (Aug)
  • Germany: Markit Mfg & Svcs PMI (Aug)
  • Eurozone: Markit Mfg & Svcs PMI (Aug)
  • Eurozone: Consumer Confidence (Aug)
  • Japan: CPI (Jul)

Friday

 

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