Market Update: Wed, Dec 12, 2018 | LPL Financial Research

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Daily Insights

May to face confidence vote on Brexit. UK Prime Minister Theresa May will face a vote of confidence after the required 48 letters of “no confidence” were received from MPs following her three-stop tour across Europe yesterday. The meetings were an attempt to seek changes to her existing deal after she was forced to abandon a planned Parliamentary vote due to a lack of support. She could be replaced as early as mid-January if a simple majority of 158 Conservative MPs vote in favor. With the March 29 deadline looming for the UK to break from the EU, with or without a Brexit deal, along with Italy’s ongoing budget scuffle with EU officials and broader European economic data trending in the wrong direction, we continue to suggest avoiding or minimizing tactical exposure to the region.

Is a shutdown coming? President Trump threatened to shut down the U.S. government next week in a discussion with Senate Minority Leaders Chuck Schumer and House Minority Leader Nancy Pelosi yesterday. So what does it mean for stocks if this happens? The good news is the S&P 500 Index has gained during each of the previous five shutdowns going back 23 years. We will take a closer look at this potential event later today on the LPL Research blog, but it’s worth noting that another, more important, debt ceiling debate will take place next summer.

Oil slide keeps inflation in check. Consumer Price Index data out this morning showed prices declined month over month, thanks to oil’s continued decline in November, which offset increases in an array of other areas including: shelter, used cars/trucks, medical care, and recreation. Meanwhile, the core reading (ex food and energy) was unchanged from the prior month but increased 2.5% year over year. Though not the Federal Reserve’s preferred inflation measure, it should keep it on track to raise rates at next week’s monetary policy meeting.

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Wednesday

  • CPI Report (MoM, Nov)
  • Eurozone Industrial Production (Oct)
  • Eurozone Employment Report (Q3)

Thursday

  • Initial Jobless Claims (Dec. 8); LP: 234K
  • European Central Bank Rate Decision
  • Nikkei Japan Manufacturing PMI (Preliminary, Dec)
  • Japan Industrial Production (Oct)
  • China Retail Sales (Nov)
  • China Industrial Production (Nov)

Friday

  • Retail Sales (MoM, Nov)
  • Industrial Production (MoM, Nov)
  • Markit US Services PMI (Preliminary, Dec)
  • Markit US Manufacturing PMI (Preliminary, Dec)
  • Markit Eurozone Manufacturing PMI (Preliminary, Dec)

 

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