Market Update: Monday, Mar 11, 2019 | LPL Financial Research

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Daily Insights

China exports surged in early March, according to China. Official data released over the weekend showed that exports surged 39.9% year over year in the first nine days of March, while officials also said that it’s normal for there to be fluctuations around the Lunar New Year holiday and that Beijing is “full of confidence” about the next stage of trade growth. The timing of the release suggests officials are looking to shore up confidence after recently-released February data showed a ~21% drop in exports.

German industrial production stalls. Industrial production figures out of Germany showed an unexpected decline in activity vs. the prior month as the auto industry’s woes continue. The data came on the heels of a surprise 2.6% decline in factory orders in February and the European Central Bank’s significant cut to its 2019 gross domestic product (GDP), forecast (from 2.8% to 2.1%). And while January figures for both industrial production and factory orders were upwardly revised for January, the environment remains fragile, and we suggest maintaining a wait-and-see approach to investing in foreign developed stocks-particularly Europe-for tactical investors.

Retail sales rebound. Retail sales rose 0.2% in January, rebounding strongly from December’s unexpected drop in sales, which was the biggest monthly slide since 2009. Today’s report showed December’s slide was revised lower to -1.6%, another sign that consumer spending declined significantly towards the end of 2018. Control-group sales, which are used to calculate GDP rose 1.1% in the month, the biggest jump since February 2014. While we expect softer growth in Q1 2019 for a variety of reasons, January’s bounce back in retail sales is encouraging, as consumer spending constitutes about 70% of GDP.

Modest pullback or something bigger? Following the strong 2019 rally, are stocks overdue for a pullback? The S&P 500 Index has rallied 17% since the December 24, 2018 low, a surprise to many given widespread concerns about slower global growth, trade uncertainty, and the age of the bull market-which turned 10 last weekend. Following that strong rally, a pullback is to be expected; but we don’t think it will get much worse than last week’s 2.1% drop, for reasons discussed in our latest Weekly Market Commentary, due out later today.

Beige Book sentiment at 7-year low. Pessimism has rapidly infiltrated Main Street’s outlook, according to the latest Federal Reserve (Fed)  Beige Book.Our Beige Book Barometer (BBB), which measures the count of strong words relative to weak words, fell to the lowest level since 2011 in the edition released March 6. Context is key to this BBB reading though, especially considering the complicated macroeconomic environment. We’ll analyze what’s driving negative Main Street sentiment on the LPL Research blog later today, and in this week’s Weekly Economic Commentary.

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Monday

Tuesday

Wednesday

  • PPI report (MoM Feb)
  • Duable Goods Orders (Preliminary, MoM, Jan)
  • Eurozone Industrial Production (Jan)
  • China Industrial Production (Feb)
  • China Retail Sales (Feb)
  • China Surveyed Jobless Rate (Feb)

Thursday

  • Import Price Index (MoM Feb)
  • Export Price Index (MoM Feb)
  • Initial Jobless Claims (March 9)
  • New Home Sales (MoM Jan)
  • Germany CPI Report (Feb)
  • Bank of Japan Rate Decision (Mar)

Friday

  • Industrial Production (MoM Feb)
  • JOLTS Job Openings Report (Jan)
  • University of Michigan Sentiment Index (Preliminary Mar)
  • Eurozone CPI Report (Feb)

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