Market Update: Wed, Jan 9, 2019 | LPL Financial Research


Daily Insights

Make it three in a row. The S&P 500 Index rose for the third day in a row for the first time since ahead of the Midterm elections. In fact, stocks haven’t closed in the red since Federal Reserve (Fed) Chairman Jerome Powell said the Fed would be ‘patient’ in regards to its interest rate policy. But just how rare has a three-day rally been? The only other times in history that stocks did this were July ’10, October ’02, right after the ’87 crash, and October ’82. All four instances came after extended weakness and marked fairly significant market lows before major rallies.

Fed minutes on deck. Minutes from the Fed’s December meeting will be released at 2 p.m. today. Investors will be looking for more context around officials’ unanimous decision to hike rates last month, even as policymakers shifted their rate projections down for 2019. However, a more hawkish tone in the minutes would likely be discounted given Powell’s more recent comments in which he said the Fed will be “patient” with monetary policy, fueling a reversal in the S&P 500 Index after it entered an intraday bear market last month. We expect the data-dependent Fed will continue to gradually hike rates, but be less aggressive than initially feared as policymakers juggle a strong domestic economy with global concerns.

Valuations supporting the rebound. Stocks have rebounded strongly-nearly 10% from late-December lows. We see further gains ahead given the fundamental foundation supporting economic growth and corporate profits, along with a Fed that appears more flexible than previously feared and improving prospects for a U.S.-China trade deal. Lower valuations are a primary reason for the bounce, which we believe have been pricing in an overly pessimistic economic and earnings outlook. Later today on the LPL Research blog, we look at what falling valuations may mean for stocks, featuring content from this week’s Weekly Market Commentary.


Click Here for our detailed Weekly Economic Calendar


  • FOMC Meeting Minutes (Dec)
  • Germany Trade Balance (Nov)
  • Eurozone Unemployment Rate (Nov)
  • China PPI (Dec)
  • China CPI (Dec)



  • CPI Report (MoM, Dec)
  • Monthly Budget Statement (Dec)


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


For Public Use – Tracking #1-809762 (Exp. 01/20)