Market Update: Wed, July 17, 2019 | LPL Financial Research

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Daily Insights

Consumer spending shows strength while manufacturing improves. Yesterday’s economic reports gave a picture of an economy continuing to expand near trend growth. Retail sales were strong in June, pushing the Atlanta Federal Reserve’s model of second quarter gross domestic product (GDP) up 0.3%, while a flat headline number on industrial production was stronger underneath the surface, with an upside surprise from the manufacturing segment offsetting weather-dependent weakness in utilities. While trade uncertainty and a slowing global economy do create downside risks, the hard data continues to support our outlook for 2.25 – 2.5% real GDP growth in 2019, with the run rate for the rest of the year a little weaker after a solid first quarter.

Stocks opened little changed. Market participants will continue to focus on the Federal Reserve (Fed), trade headlines, and the flurry of earnings reports today. President Trump said Tuesday he could place more tariffs on China. The Fed’s Beige Book, a snapshot of economic conditions around the country, is due out Wednesday afternoon. Second quarter earnings reported so far have lifted the expected S&P 500 Index earnings growth rate by nearly one percentage point.

The Dow’s hot July. Blue chip stocks have been on a tear this month. The Dow Jones Industrial Average (Dow) has risen 2.8% in July, posting three straight record closes along the way for the first time since January 2018. In today’s LPL Research blog post, we’ll highlight the catalysts behind large cap stocks’ summer performance.

 

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