Market Update: Wed, July 31, 2019 | LPL Financial Research


Daily Insights

Stocks open higher on Fed day. Apple’s well-received earnings report is helping boost market sentiment this morning, but the Federal Reserve (Fed) is taking center stage. A 25 basis point (0.25%) cut is fully priced in–and is our expectation–but the bond market is suggesting a slight chance of a bigger cut. Trade discussions in Shanghai ended with no sign of progress, suggesting the Fed and, to a lesser extent earnings, are keeping stock indexes well supported. Markets are also reacting to a soft but slightly improved survey of Chinese manufacturing.

Euro-area gross domestic product (GDP) grew just 0.2% during the second quarter. This lackluster performance, while in line with estimates, along with falling inflation, lay the groundwork for more European Central Bank stimulus, possibly as soon as September. Despite higher valuations, we maintain our strong preference for U.S. equities over developed international primarily due to sluggish growth in Europe.

Here comes August. The good news is July tends to be a nice month for stocks; the bad news is August isn’t. In fact, over the past 10 years, no month has a lower average S&P 500 Index return than August. Additionally, recent pre-election years have seen some large moves lower. In August 2015, China surprised markets by devaluing the yuan, which led to the first 1,000-point Dow drop ever, while S&P downgraded the U.S. credit rating in August 2011. Could 2019 see another surprise event? We discuss this in today’s LPL Research blog.



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.

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.

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

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.

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


If your advisor is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are:


For Public Use – Tracking # 1-877965