Volatility reemerges, but focus on the long term. Major U.S. indexes are recouping some of yesterday’s losses, which stemmed from reports that the White House rejected an offer hold preparatory talks ahead of trade negotiations between top officials later this month. But after the S&P 500 Index’s ~10% run over the past four weeks (details below), including a four-day win streak prior to yesterday’s slide, traders were likely looking for a reason to take some profits. However, focus is returning to corporate earnings, which ultimately drive stock prices, as upbeat numbers this morning from three Dow components are providing the benchmark index with a boost and underpinning a tentative rebound in sentiment. To be sure, global growth concerns, the U.S. government shutdown, and a host of other issues are still on the market’s radar, but it’s important for investors to discount short-term swings and focus on their long-term goals.
Stocks up, now what? The S&P 500 has gained more than 10% over the past four weeks–which includes the 2.7% selloff on Christmas Eve–, for the best four week stretch since 2011. But even more impressive is how consistent the gains have been. In fact, the S&P 500 has added at least 1.5% for four consecutive weeks for the first time since coming off of the March 2009 lows. Today on the LPL Research blog we will show why this could potentially be a bullish development – as stocks tend to outperform over the following three-month period after strong four-week periods.
In case you missed it: LPL Research media interviews. LPL Research on CNBC. Chief Investment Strategist John Lynch was on CNBC January 17th talking markets. You can watch the interview here. LPL Research on Bloomberg radio. Senior Market Strategist Ryan Detrick was on Bloomberg radio talking markets. You can listen to his comments here (starting at the 29 minute mark).
- Richmond Fed Manufacturing Index (Jan)
- Eurozone Consumer Confidence (Jan)
- Nikkei Japan Manufacturing PMI (Preliminary, Jan)
- Initial Jobless Claims (Jan. 19)
- Markit US Composite PMI (Preliminary, Jan)
- Markit US Manufacturing PMI (Preliminary, Jan)
- Markit US Services PMI (Preliminary, Jan)
- Leading Index (MoM, Dec)
- Japan Leading Index (Nov)
- Markit Eurozone Manufacturing PMI (Preliminary, Jan)
- European Central Bank Rate Decision (N/A)
- Japan Tokyo CPI Report (Jan)
- Durable Goods Orders (Preliminary, Jan)
- New Home Sales (MoM, Dec)
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Index data obtained via FactSet
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