Market Update: Tue, Feb 19, 2019 | LPL Financial Research

LPLResearch-Macro-View

Daily Insights

Revised economic forecasts. 2019 has been a busy year so far. The U.S. has weathered a 35-day government shutdown, global data have deteriorated further, trade headlines continue to dominate the news, and the Federal Reserve (Fed) has made a significant U-turn in monetary policy plans, all on top of the sharp market sell-off in late 2018. In response to these events, we’ve adjusted a few 2019 forecasts lower. We’ll explain more of our reasoning in today’s Weekly Economic Commentary, and on the LPL Research blog later today.

The rally continues. Stocks gained again last week, with the Dow and Nasdaq both up eight weeks in a row. This week in our Weekly Market Commentary we show why a break could be warranted in the near-term, but also discuss sentiment indicators that still show room for investor optimism to rise before it becomes a contrarian warning.

Earnings season enters home stretch. With nearly 80% of S&P 500 Index companies having reported, fourth quarter 2018 earnings growth is tracking to 16.2% year over year, only marginally above prior estimates and slightly below the prior week. Energy has produced the biggest upside surprise, followed by communication services. Slower global growth, trade tensions, and lowered energy sector expectations have contributed to a nearly 3% overall cut to 2019 S&P 500 earnings estimates during reporting season, similar to long-term averages. We believe the lowered bar and potential for a trade deal with China may facilitate near-term upside surprises and maintain our 2019 S&P 500 earnings growth forecast in the mid-single digits.

Earnings-Dashboard-2.19.19

NEW LPL Market Signals Podcast. In this week’s episode of the Market Signals Podcast, LPL Financial Chief Investment Strategist John Lynch and Senior Market Strategist Ryan Detrick podcast focus on the continuing market rally, LPL Research’s gross domestic product forecast, and more. Subscribe to the free Market Signals podcast series on iTunes, Google Play, Spotify or wherever you get your podcasts!

 LPLResearch-Monitoring-the-Week-Ahead

Click Here for our detailed Weekly Economic Calendar

Tuesday

  • Japan Trade Balance (Jan)
  • Japan Exports (Jan)
  • Japan Imports (Jan)

Wednesday

Thursday

  • Initial Jobless Claims (Feb 16)
  • Durable Goods Orders (Preliminary Dec)
  • Markit US Manufacturing PMI (Preliminary Feb)
  • Markit US Services PMI (Preliminary Feb)
  • Markit US Composite PMI (Preliminary Feb)
  • Leading Index (Jan)
  • Existing Home Sales (Jan)
  • Germany CPI Report (Jan)
  • Markit Eurozone Manufacturing PMI (Preliminary Feb)
  • Japan CPI Report (Jan)

Friday

  • Germany GDP Report (Q4 2018)
  • Eurozone CPI Report (Jan)

IMPORTANT DISCLOSURES

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 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

Member FINRA/SIPC

For Public Use – Tracking # 1-823822 (Exp. 2/20)