Market Update: Mon, Aug 12, 2019 | LPL Financial Research

Daily Insights

Earnings continue gradual improvement. With 90% of S&P 500 Index companies’ results in, second quarter 2019 earnings are tracking down -0.7% year over year, above June 30 estimates of -2.7% despite a more than 1 percentage point drag from Boeing and a modest improvement over the prior week. Forward earnings estimates have fallen by 1.5% since June 30, roughly in line with recent trends and reflecting tariff costs, slower global growth, and a 1 to 2 percentage point drag from a strong dollar. While management teams’ overall tone has been okay, tariff and trade mentions on earnings conference calls have increased.

Earnings-Dashboard-8.12.19

Stocks slide. Global stocks are down modestly this morning amid escalating political tensions in Hong Kong and fragile sentiment in financial markets. While Hong Kong protests are unnerving, we don’t think they will have a material impact on the U.S. economic outlook. However, that situation adds to already high global uncertainty, which has rattled markets recently.

New Weekly Market Performance report. We are pleased to share our new Weekly Market Performance report with insights on major asset classes. U.S. stocks struggled last week after China retaliated against new tariff threats by devaluing the yuan, and several central banks cut interest rates, boosting the U.S. dollar and putting pressure on the Federal Reserve (Fed) to loosen policy more. Check out our new Weekly Market Performance report for more details on last week’s market action.

The new (ab)normal. Recent volatility has been jarring after a period of relative calm and a series of new highs. However, it’s important to remember that stock market volatility has been about average in 2019, and the S&P 500 Index is still up about 16% year to date (through the end of last week). We’ll provide more perspective on the recent selloff in this week’s Weekly Market Commentary: The New (Ab)normal.

Weekly Economic Calendar. Second quarter earnings season is winding down, and this week’s economic slate is light, so markets may be more sensitive to trade and geopolitical developments. In the United States, July Consumer Price Index (CPI) data comes out August 13, and retail sales data will be released August 15. Internationally, investors will get their first look at second-quarter Eurozone and Germany gross domestic product (GDP) prints August 14.

 

IMPORTANT DISCLOSURES

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:

Member FINRA/SIPC

For Public Use – Tracking # 1-881909