Market Update: Fri, Nov 16, 2018 | LPL Financial Research

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Daily Insights

  • S&P 500 snaps 5-day losing streak on Thursday. The S&P 500 Index rallied throughout the day yesterday, closing higher for the first time last Wednesday. The advance was led by the technology and energy sectors, which have been relative underperformers since the start of the correction, while the more-defensive consumer staples, utilities and real estate sectors lagged. The S&P 500 remains about 1% below its 200 day moving average, which may serve as resistance, along with the 2,814 level where the last two rallies have failed. On the positive side, we remain well above the intraday lows from late October (which should serve as potential support), and seasonally, we are in the strongest part of the year.

  • Rising Brexit uncertainty, slowing growth momentum weighing on Europe. In a blow to Theresa May’s negotiated Brexit deal, and possibly her job, several high-ranking party members resigned, including Brexit minister Dominic Raab, just hours after May claimed she had backing to get it through. The British pound, which has served somewhat as a proxy for the progress of Brexit negotiations, fell sharply vs. the euro and U.S. dollar yesterday. European stock indexes are poised to drop more than 2% on the week amid the resurgence in uncertainty tied to the U.K.’s divorce deal with the European Union, Italy’s ongoing budget battle, and now concerns about a loss of growth momentum in the region after European Central Bank President Mario Draghi said as much in a speech earlier today. News and data out of the region continue to support our preference for domestic equities with U.S. data remaining positive overall and midterm elections now in the rearview mirror.

  • Make that 50. Yesterday, the S&P 500 gained more than 1%, making it the 50th time so far in 2018 that the index has gained or lost at least 1%. This is well above the historically calm 2017, in which the S&P 500 moved 1% only eight times. On average, the S&P 500 has moved 1% about 50 times each year since 1950. Today on the LPL Research blog, we will take a closer look at the recent volatility and why this year might not be as volatile as it appears.

  • LPL Market Signals Podcast. In our latest episode, listen to LPL Financial Chief Investment Strategist John Lynch and Senior Market Strategist Ryan Detrick discuss potential post-midterm gridlock and why history indicates it might not be bad for investors. Subscribe to the free Market Signals podcast series on iTunes, Google Play, Spotify, or wherever you get your podcasts!

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Friday

  • Eurozone CPI Report (Oct)
  • Industrial Production (MoM, Oct)
  • Capacity Utilization (Oct)

 

IMPORTANT DISCLOSURES

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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Index data obtained via FactSet

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