Market Update: Fri, July 12, 2019 | LPL Financial Research

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Daily Insights

27,000 comes before 3,000. The Dow closed above 27,000 for the first time ever, while the S&P 500 Index missed 3,000 by a fraction of a point on Thursday, although both made new all-time highs yet again. What is interesting about the Dow’s 27,000 milestone is it took the Dow nearly 18 months to go from 26,000 to 27,000 (less than a 4% move). This was one of the longest stretches it has ever taken the Dow to hit a new thousand milestone. On one hand, stocks are up significantly so far in 2019, but in the bigger picture, they really aren’t that far above where they were in January 2018. 

A rate cut with stocks at highs? Can the Federal Reserve (Fed) really cut rates with stocks at new highs? This has been one of the top questions we’ve heard lately, and it turns out, they sure can. In fact, going back to 1980, the Fed has cut rates 17 times with the S&P 500 within 2% of a new all-time high. Incredibly, stocks were higher all 17 times in the following 12 months. We take a look at this potentially bullish development later today on the LPL Research blog.

Producer prices pick up. June’s Producer Price Index (PPI) data showed more evidence that inflationary pressures are picking up in the U.S. economy after a tepid few months. Core PPI (excluding food and energy prices) rose 2.3% year over year in June, halting a five-month slide in wholesale price growth. Slowing inflation has been a concern for investors and the Fed this year, especially amid slipping global demand as trade tensions linger.

 

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