Market Update: Tues, June 11, 2019 | LPL Financial Research


Daily Insights

China stimulus driving stocks higher globally. Stocks are poised to add to recent gains, lifted by China’s support for its currency and infrastructure spending. The market’s positive reaction comes despite President Trump’s threat to raise tariffs again if President Xi does not meet with him at the G-20 Summit later this month. Market participants appear to like the support for the Chinese economy more than they are worried about China digging in for a longer fight. We expect U.S.-China relations to get worse before they get better but continue to expect progress over the next several months.

Long-term yields rally. A resurgence in risk appetite has halted the recent drop in U.S. longer-term yields. The 10-year Treasury yield rebounded on Monday, a day after closing at a fresh 20-month low of 2.08%. The recent drop in yields has been swift, and we’ve maintained that the 10-year yield is now significantly lower than what economic fundamentals justify. Still, the uncertainty around trade, geopolitics and global growth could limit yields’ upside in the coming months.

Producer price growth slows. Wholesale price growth fell to a 16-month low in May. The core Producer Price Index, which excludes food and energy prices, rose 2.3% year over year, its slowest pace of growth since January 2018. Wage and producer pricing pressures have abated recently and remain at manageable levels.

Small business optimism climbs. The National Federation of Independent Business’ Small Business Optimism gauge climbed to 105 in May, a seven-month high. Respondents that made capital outlays rose to a 15-month high, while businesses with plans to increase capital spending rose to a seven-month high. Recent trade escalation hasn’t curbed consumer and business sentiment yet, a sign that demand could stay solid enough to weather higher tariffs.

Course correction. Bonds have increasingly signaled that policy may be too tight for an economy tied up in a drawn-out trade dispute. There have been signs that growth could slow over the coming quarters and eventually, the Federal Reserve (Fed) may have to intervene by lowering interest rates. On today’s LPL Research blog, we examine the history of Fed “course corrections,” including one example with several parallels to today’s environment.


Click Here for our detailed Weekly Economic Calendar


  • NFIB Small Business Optimism Index (May); LP: 103.5
  • PPI Report (May); Cons: 0.1%, LP: 0.2%
  • Japan PPI Report (May)
  • China CPI Report (May)
  • China PPI Report (May)


  • CPI Report (May); Cons: 0.1%, LP: 0.3%


  • Import Price Index (May); Cons: -0.3%, LP: 0.2%
  • Export Price Index (May); LP: 0.2%
  • Initial Jobless Claims (Jun. 8); LP: 215K
  • Germany CPI Report (May)
  • Eurozone Industrial Production (Apr)
  • China Industrial Production (May)
  • China Surveyed Jobless Rate (May)


  • Retail Sales (May); Cons: 0.6%, LP: -0.2%
  • Industrial Production (May); Cons: 0.2%, LP: -0.5%
  • University of Michigan Sentiment Index (Preliminary, Jun); LP: 100
  • Japan Industrial Production (Apr)


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.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

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.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL is not an affiliate of and makes no representation with respect to such entity.

Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit

Index data obtained via FactSet


For Public Use – Tracking # 1-862215 (6/20)