Market Update: Thurs, June 13, 2019 | LPL Financial Research


Daily Insights

Stocks open higher on energy support. Attacks on two tankers on the Gulf of Oman are driving oil prices (+3-4%) and energy stocks higher this morning. Nothing particularly new on the trade front besides more tough talk from Chinese leaders suggesting they won’t cave to U.S. pressure. Expectations for a breakthrough at the G-20 Summit later this month may have faded a bit, though indications that the two leaders will meet in Japan and President Trump’s refusal to set a hard deadline for new tariffs could be interpreted positively.

Global growth continues to edge lower. The latest round of Purchasing Managers’ Index (PMI) data point clearly to slowing global growth, including the first sub-50 reading for the JPMorgan Global Manufacturing PMI since 2012 (May’s reading was 49.8). Just 17% of global PMIs are up year over year, according to data from Ned Davis Research, while only half are over 50, the lowest since the oil and China-driven soft patch in late 2015-early 2016. Weakness in the export components of these surveys point clearly to trade conflicts as a primary culprit.

What if the Fed cuts? The general consensus is the Federal Reserve (Fed) will cut rates at least once this year, if not multiple times. Could this first cut signal bigger problems? After all, the Fed cut rates in 2001 and 2007 just ahead of recessions and major bear markets. Taking a look back further in history though reveals stocks can do just fine after the first rate cut, as we’ll show later today on the LPL Research blog. In fact, periods like 1989, 1995, and 1998 all saw significant stock market gains 12 months after the first rate cut.


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  • 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)


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Index data obtained via FactSet


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