Market Update: Thurs, Apr 11, 2019 | LPL Financial Research

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Daily Insights

Brexit decision delayed-again. Last night EU leaders approved a six-month delay for a Brexit decision, through October 31, though an earlier exit is still possible if an agreement can be reached. Though opinions varied on the length of the delay, this outcome was widely expected. The chances of a second referendum that could prevent Brexit from happening at all have probably fallen further, but the delay likely increases the chances of a change in U.K. leadership.

Another step forward in U.S.-China trade talks. Lead negotiators for the U.S. and China have reportedly agreed on an enforcement mechanism centered on intellectual property protections. Enforcement had been one of the primary sticking points toward finalizing a deal, suggesting we’re on track for a signed agreement by June, if not sooner.

Global economy showing signs of stabilization. The OECD puts out leading global indicators to gauge economic momentum over the next six months, and the latest reading showed a slight improvement and corroborates the stability in global manufacturing surveys we highlighted in this week’s Weekly Economic Commentary. The likely boost in business confidence from a U.S.-China trade deal alongside fiscal stimulus in the U.S. and China provides a better setup for global growth beginning in the second quarter of 2019. Japan and Europe simply need to hang in there and let the rising tide lift their boats.

Context on patience. Minutes of the Federal Reserve’s (Fed) March meeting, released yesterday, provided more context on policymakers’ deliberations as the central bank irons out its new patient stance. Members discussed risks to the U.S. economy, including “significant uncertainties” around the global economic outlook and muted inflation pressures. Still, policymakers noted they expect U.S. economic growth to continue amid a strong labor market and moderate inflation. Overall, the minutes showed that a “majority of participants” expected rates will remain unchanged through at least the end of this year, aligning with the group’s median rate projection for year-end 2019.

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Thursday

  • PPI Report (Mar)
  • Initial Jobless Claims (Apr. 6)
  • Germany CPI Report (Mar)
  • China Exports (Mar)
  • China Trade Balance (Mar)
  • China Imports (Mar)

Friday

  • Import Price Index (Mar)
  • Export Price Index (Mar)
  • University of Michigan Sentiment Index (Preliminary, Apr)
  • Eurozone Industrial Production (Feb)

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