Market Update: Wednesday, August 29, 2018

LPLResearch-Macro-View

Daily Insights

  • GDP revision reinforces solid second-quarter growth. Gross domestic product (GDP) growth was revised up to 4.2% today (from 4.1%), despite consensus expectations for a downward revision to 4.0%. The contribution to output from business spending was 0.15% higher than the original print, while the contribution from net exports was 0.11% higher. Overall, we remain encouraged by robust economic growth, and we still expect up to 3.0% GDP growth in 2018 as the pace of expansion moderates in the second half of the year.*

  • Cooling in the housing market… Housing prices, represented by the S&P CoreLogic Case-Shiller 20-City Composite, rose 0.1% in June, the smallest monthly increase since 2016 and below consensus estimates for a 0.2% gain. Real estate prices climbed 6.3% year over year through June, down from a 6.5% gain the month prior. While home prices remain elevated, other housing-related indicators have weakened. Data earlier this month showed existing home sales fell for the fourth straight month in July, while new home sales fell to the lowest point in nine months. Housing starts, or the number of new housing units that have started construction, grew 0.9% last month after a 12.9% plunge in June. While the housing recovery has been inconsistent, real-estate activity may reflect homebuyers’ concerns around interest rates and future economic health.

  • …but U.S. consumer confidence is growing. Outside of the housing market, the U.S. consumer is becoming more confident. The Conference Board’s Consumer Confidence Index rose to its highest point of the expansion in July versus consensus expectations for a slight decrease, showing that consumers expect better business and labor-market conditions to boost their spending in the next six months.

  • Outstanding earnings season. With just a small handful of companies left to report, S&P 500 Index earnings are up ~25% year over year, or 18-19% without the boost from corporate tax cuts. At noon eastern today on the LPL Research Blog, we highlight our key takeaways from second-quarter earnings season and our S&P 500 profit forecast for the rest of the year.

LPLResearch-Monitoring-the-Week-Ahead

Click Here for our detailed Weekly Economic Calendar

Wednesday

Thursday

  • 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)

Friday

 

IMPORTANT DISCLOSURES

*Additional descriptions and disclosure are available in our publication Midyear Outlook 2018: The Plot Thickens.

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

Member FINRA/SIPC

For Public Use – Tracking # 1- 765179 (Exp. 8/19)