Market Update: Friday, October 12, 2018

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Daily Insights

  • Stocks rebounding in early trading. The S&P 500 Index jumped more than 1% at the open this morning amid investors’ optimism about third-quarter earnings results and strong exports data out of China. U.S. indices also rebounded late yesterday on news that President Trump and Chinese leader Xi Jinping will meet next month to discuss trade. Through yesterday, the Nasdaq Composite was headed for its worst weekly drop since January 2016, while the S&P 500 and Dow were poised for their biggest weekly declines since March.

  • Generally positive bank results. Banks kicked off their third-quarter earnings season today with mostly well-received results. Loan demand outside of housing is healthy, while consumer credit trends (charge-offs and provisions for loan losses) were solid. Trading results were not surprisingly mixed. We continue to like financials, which are benefiting from rising rates and deregulation.* We’ll have more on earnings next week as reporting season gets rolling.

  • Breaking the 200-day. The S&P 500 lost 5.3% over the past two days, extending its losing streak to six days. In recent memory, only August 2015, Brexit, and early February 2018 had worse two-day stretches. Along the way, the S&P 500 closed beneath its 200-day moving average for the first time in six months. Yesterday was only the third day it has closed beneath this long-term trendline since March 2016.

  • New Market Sell-Off Video: Watch LPL Research Chief Investment Strategist John Lynch share views on the sell-off and what’s ahead: https://youtu.be/T2Oj1hqhUIs

  • Introducing LPL Research Weekly Insights: We are excited to introduce a mobile-friendly, client-approved overview of our weekly commentaries and blog highlights. LPL Research Weekly Insights is easily shared via social platforms and email, and can also be embedded on your websites. Get your digital download today!

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Click Here for our detailed Weekly Economic Calendar

Friday

  • Import Price Index (MoM, Sep)
  • Export Price Index (MoM, Sep)
  • Eurozone Industrial Production (Aug)


IMPORTANT DISCLOSURES

*For further disclosure, please see the Outlook 2018: Return of the Business Cycle 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.

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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.

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Index data obtained via FactSet

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