- Outstanding earnings season by many measures. Second quarter numbers were strong even without the boost from the new tax law, while guidance was generally positive despite tariffs and trade policy uncertainty. With just 15 index constituents left to report, S&P 500 Index earnings rose 25% year over year, nearly matching the 26% growth rate from the quarter before. Even without the boost from tax cuts (estimated 6-7%) earnings growth came in at a still-outstanding 18-19%. In our latest Weekly Market Commentary due out later today, we recap an outstanding second quarter earnings season and highlight three key takeaways.
- Trade tensions ease. Positive trade headlines provided a lift to the MSCI ACWI this morning, as reports suggest a NAFTA deal between the U.S. and Mexico may come as soon as today. Also, Chinese stocks, as measured by the Shanghai Composite, surged for a second straight day after China’s central bank hinted Friday that it would take steps to support the yuan in moves that could be seen as a concession and ease the U.S. and China’s future trade negotiations.
- Finally. The S&P 500 finally closed at a new all-time high on Friday for the first time since late January. We’ve seen many signs that suggested this would eventually happen and fortunately it did. Now, the logical question is “what happens next?” Going back to 1950, we found there were 18 other times the S&P 500 went at least six months or more without a new high. The good news is the index was higher a year later 17 of those times. Today, on the LPL Research blog, we will take a closer look at this potentially bullish phenomenon.
- Jackson Hole post-mortem. Federal Reserve (Fed) Chair Jerome Powell delivered a speech Friday at the Economic Policy Symposium in Jackson Hole, Wyoming. Powell’s comments leaned slightly dovish as he signaled flexibility in future monetary policy decisions, reassuring us that his approach will (hopefully) avoid a policy mistake. In this week’s Weekly Economic Commentary, due out later today, we analyze Powell’s pragmatic approach to monetary policy in the current environment, and how that approach could influence the Fed’s future decisions.
- The week ahead. This week (August 27-31), investors get updates on consumer confidence and inflation in the U.S. and Eurozone, among other countries. Also, the second revision to second quarter U.S. gross domestic product comes Thursday (Bloomberg consensus 4.0%), followed by U.S. consumer income and spending data on Thursday. Finally, expect traders to keep an eye on the Personal Consumption Expenditures Index, a key inflation metric hovering around the Fed’s target range. Track these and other important events on our Weekly Global Economic & Policy Calendar.
- Personal Income (Jul)
- Personal Spending (Jul)
- Germany: CPI (Aug)
- Eurozone: Consumer Confidence (Aug)
- Japan: Jobless Rate (Jul)
- Japan: Tokyo CPI (Aug)
- Japan: Industrial Production (Jul)
- China: Mfg. & Non-Mfg. PMI (Aug)
- Chicago PMI (Aug)
- France: CPI (Aug)
- Eurozone: Unemployment Rate (Jul)
- Eurozone: CPI (Aug)
- Italy: CPI (Aug)
- Italy: GDP (Q2)
International investing involves special risks such as currency fluctuation and political instability dn may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
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 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 company names noted herein are for educational purposes only and not an indication of trading intent or a solitication of their products or services. LPL Financial doesn’t provide research on individual equities.
All performance referenced is historical and is no guarantee of future results.
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.
Index data obtained via FactSet
For Public Use – Tracking # 1- 764495 (Exp. 8/19)