Market Update: Tue, Feb 12, 2019 | LPL Financial Research


Daily Insights

Yield curve remains stable, despite declines in 10-year yields. The difference between 10-year and 2-year Treasuries, known as the yield curve, has remained stable since late December with declines in the 2-year yield approximately matching the decline in the 10-year. A stable curve on declining yields typically signals a negative assessment of the economy. The Fed may have been too aggressive for markets with its fourth hike of 2018, but a strong shift in messaging in January has calmed market fears. Still, the Fed’s recent dovish shift amid a backdrop of still-healthy economic growth underpins our expectation for the yield curve to steepen modestly over the rest of the year. The Fed will provide a new set of forecast and rate projections at its next meeting in March.

Dollar rebound erases 2019 weakness. Investors are shifting back into risk assets after U.S. lawmakers agreed “in principle” to avoid another government shutdown, and as expectations mount that the March 1 deadline for a trade deal will be extended. Treasury yields are rebounding, along with stocks, while the U.S. dollar is poised to snap an eight day win streak that saw the greenback recoup its year-to-date losses, which began on January 30th, the date the most recent Fed policy meeting adjourned. The more dovish tone from Chairman Jerome Powell would normally be expected to put downward pressure on the dollar, all else equal; but all else was clearly not equal. Adding to investor angst have been murmurs that U.S. firms may be headed for an earnings recession-we discuss out thoughts on corporate earnings in this week’s Weekly Market Commentary. All of which has spurred demand for safe-haven Treasuries, which much be purchased with dollars.

Bund yields flirt with negative territory. Germany’s benchmark bund yield is on the cusp of negative territory as Europe’s biggest economy battles economic weakness and slowing inflation. On the LPL Research blog today, we’ll dig into investors’ increased appetite globally for government debt (including Germany’s), and analyze what this could mean for U.S. Treasury yields’ path this year.


Click Here for our detailed Weekly Economic Calendar



  • CPI Report (MoM, Jan)
  • Eurozone Industrial Production (Dec)
  • Japan GDP Report (Preliminary, Q4 2018)
  • China Imports (Jan)
  • China Exports (Jan)
  • China Trade Balance (Jan)


  • PPI Report (MoM, Jan)
  • Initial Jobless Claims (Feb. 9)
  • Germany GDP Report (Preliminary, Q4 2018)
  • Eurozone GDP Report (Preliminary, Q4 2018)
  • Japan Industrial Production (Dec)
  • China CPI Report (Jan)
  • China PPI Report (Jan)


  • Retail Sales (MoM, Jan)
  • Industrial Production (MoM, Jan); Cons: 0.2%, LP: 0.3%
  • University of Michigan Sentiment Index (Preliminary, Feb); LP: 91.2
  • Eurozone Trade Balance (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.

U.S. Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. They are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

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 solicitation 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 # 1-812669 (Exp. 2/20)