Market Update: Thurs, July 18, 2019 | LPL Financial Research

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Daily Insights

Stocks opened slightly lower with earnings and trade in focus. Market participants are digesting a wave of earnings results this morning, including poorly received results from Netflix, and expressing some concern about the cautious tone of the latest trade headlines. Weak export data in Japan (a close China trading partner), Korea’s lowered economic growth forecast, and significant mentions of tariffs in the Federal Reserve’s Beige Book all highlight the ongoing impact of the U.S. China trade dispute. The good news is the two sides are talking this week, according to Treasury Secretary Steven Mnuchin.

Are developed international-market stock valuations too low to ignore? Stock valuations in developed-international markets are quite a bit lower than those in the United States. However, peel back the onion and you will find that the MSCI EAFE Index–the benchmark for developed international equities primarily composed of European and Japanese stocks–actually appears closer to fairly valued than underpriced due to different sector and profitability profiles. We discuss international stock valuations today on the LPL Research Blog.

 

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

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