- LPL Market Signals Podcast. In the latest episode of the Market Signals Podcast, listen to Equity Strategist & Portfolio Manager Jeff Buchbinder and Chief Investment Strategist John Lynch discuss Fed Chair Jerome Powell’s speech at the annual meeting of the National Association for Business Economics, as well as some of the factors pointing to continued strength in the economy. Market Signals by LPL Financial is now available on iTunes, Google Play and Spotify. Please join our discussion on social via #LPLMarketSignals.
- Global equities near flat after last week’s selloff. U.S. equities opened modestly lower and European stocks are near flat midday as traders reassess the investment landscape following last week’s steep declines. Solid retail sales figures (see below) and better-than-expected Empire Manufacturing Index data are providing some support in the U.S., though negotiators failure to come to terms on a Brexit deal over the weekend is keeping investors on edge ahead of Wednesday’s European Summit. Overnight, stocks in Asia extended last week’s declines with major indexes in China, Hong Kong, Taiwan, and Japan falling more than 1%. Among the drivers were traders’ concerns an interview yesterday with President Trump in which he reiterated that more tariffs may be imposed on Chinese goods.
- Earnings season effectively kicked off Friday with several big banks reporting third quarter results. S&P 500 Index companies are expected to report their ninth consecutive increase in profits and third consecutive quarter with an increase of over 20%, as we discuss in our latest LPL Research blog due out later today. We expect strong earnings gains to be driven mostly by solid economic growth, particularly manufacturing, and tax cuts. In addition, higher oil prices should give energy sector profits a boost and the interest rate environment has gotten better for financial companies. This week, 54 S&P 500 companies will report quarterly results.
- Retail sales lower than expected, but remain healthy. Weakness in restaurant receipts weighed on retail sales last month, which fell 0.1% from August, well below consensus estimates for a 0.6% increase. However, the 1.8% drop in consumer spending at restaurants may reflect the impact of Hurricane Florence, and broad strength across most other categories suggests consumption remains strong. Also, retail control-group sales, which are used to calculate gross domestic product, and exclude food services, auto dealers, building-materials stores and gasoline stations, topped estimates with a 0.5% rise month over month.
- S&P 500 lost more than 4% last week, its worst week since March. Rising interest rates and trade tensions were cited as the primary causes of the selloff. Concerns about potential peak corporate profit margins and an overcrowded technology trade also likely played a role in upsetting a market that had been extraordinarily calm over the past six months. In today’s Weekly Market Commentary, we share some perspective on the latest bout of market volatility, which has actually been fairly normal.
- Inflation readings and the Fed’s path. Markets are growing increasingly sensitive to any inflation data that may encourage the Federal Reserve (Fed) to consider an accelerated path of monetary policy tightening. In this week’s Weekly Economic Commentary, we examine recent inflation reports, and explain our outlook for inflation based on signs from the latest data.
- Industrial Production MoM (Sept)
- UK Unemployment Rate
- German ZEW Economic Sentiment
- China Money Supply
- MBA Mortgage Applications
- Retail Sales Advance MoM (Sept)
- Housing Starts (Sept)
- Building Permits (Sept)
- UK PPI Output
- EU CPI Harmonized
- Initial Jobless Claims
- Leading Index (Sept)
- China GDP Y/Y
- China Industrial Output Y/Y
- China Retail Sales Y/Y
- Existing Home Sales (Sept)
- Baker Hughes U.S. Rig Count (Oct)
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Index data obtained via FactSet
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