Fed day. All eyes are on the Federal Reserve’s (Fed) interest-rate announcement and press conference today for signals on future policy after a volatile December. Fed fund futures are pricing in about a 70% probability that the central bank will keep rates unchanged in 2019, while the Fed’s December dot plot shows policymakers expect two rate hikes this year. While we expect a pause at this meeting and one (maybe two) rate hikes this year, we’ll be watching the Fed today for clues on members’ policymakers’ policy plans amid solid U.S. economic fundamentals, but increasing global headwinds. On the LPL Research blog today, we’ll outline more details we’ll be watching for in today’s Fed events.
Solid ADP report. Today’s Automatic Data Processing (ADP) employment report showed U.S. companies hired 213K workers in January, higher than consensus estimates for a 181K increase. A solid ADP report is typically an encouraging sign for the nonfarm payrolls report, which is scheduled to be released Friday morning. Data on the jobs market has been especially encouraging recently, defying other reports suggesting weakness in pockets of the U.S. economy. Last week’s jobless claims number was the lowest in 49 years (a sign that a recession is further off than many expect, as we noted here on the blog), while December’s 312K nonfarm payrolls gain beat consensus estimates by the highest margin since June 2016.
Consumer confidence slides. The Conference Board’s measure of consumer confidence slid for a second-straight month in January, according to data released yesterday. Consumer confidence is now at an 18-month low, and its two-month slide has been the worst since November 2008. U.S. stocks’ steep slide to end 2018 and the government shutdown have soured U.S. consumers’ sentiment, even though macroeconomic data has been relatively encouraging and the labor market remains strong. We expect consumer confidence to recover next month amid stocks’ recovery and a resolution to the shutdown, and we believe U.S. consumer strength will help buoy the next leg of the economic expansion.
New Street View video. Chief Investment strategist John Lynch discusses the recent government shutdown and market implications in our new, client-approved video. Watch here
- ADP Employment Report (Jan)
- GDP Report (QoQ, Q4 2018)
- Pending Home Sales (MoM, Dec)
- Federal Reserve Rate Decision (N/A)
- Japan Consumer Confidence Index (Jan)
- Eurozone Consumer Confidence (Jan)
- Germany CPI Report (Preliminary, Jan)
- Japan Industrial Production (Preliminary, Dec)
- China Non-Manufacturing PMI (Jan)
- China Manufacturing PMI (Jan)
- Employment Cost Index (QoQ, Q4 2018)
- Personal Income (MoM, Dec)
- Personal Spending (MoM, Dec)
- Core PCE (YoY, Dec)
- Eurozone GDP Report (Q4 2018)
- Japan Jobless Rate (Dec)
- Nikkei Japan Manufacturing PMI (Jan)
- Nonfarm Payrolls Report (Jan)
- Markit US Manufacturing PMI (Jan)
- ISM Manufacturing PMI (Jan)
- Markit Eurozone Manufacturing PMI (Jan)
- Eurozone CPI Report (Jan)
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 #1-817074 (Exp. 01/20)