Market Update: Mon, Aug 19, 2019 | LPL Financial Research

Daily Insights

Solid earnings considering the stiff headwinds. With only about 30 S&P 500 Index companies left to report results, second quarter 2019 earnings for the index are tracking down 0.7% year over year according to FactSet, above June 30, 2019, estimates (-2.7%) despite a 1.5 percentage point drag from Boeing. Earnings estimates for the next four quarters have fallen 1.6% since June 30, reflecting tariff costs, slower global growth, and a strong U.S. dollar. Trade remains the primary focus, with nearly 30% of index constituents referencing “tariffs” on quarterly earnings calls.

Earnings-Dashboard-8.19.19

Stocks rise. Global stocks are up across the board this morning amid optimistic U.S.-China trade headlines and reports that Germany is considering additional fiscal stimulus to combat economic weakness. Today’s upbeat sentiment is a reprieve from the last three weeks, in which the S&P 500 fell as much as 6% as the United States threatened more tariffs on Chinese imports and more signs of slowing emerged in global economic data. We’re in the dog days of summer, and the data flow could be light in the upcoming week, so financial markets could be bumpy as investors focus more on headlines.

Weekly Economic Calendar. In the week ahead, preliminary August Markit Purchasing Managers’ Index (PMI) data and July Conference Board Leading Economic Index data will be released Thursday. Investors will also get more Federal Reserve (Fed) commentary this week, as policymakers are scheduled to kick off the Fed’s annual Economic Policy Symposium in Jackson Hole, WY, Friday, and minutes from the Fed’s July 30-31 meeting will be released Wednesday. In global markets, Markit PMI data for international economies will be in focus.

Tweaking our forecasts. While the United States and China are expected to continue talks in September, our timetable for a potential U.S.-China agreement has been pushed out. In response, we’ve tweaked our 2019 forecasts to reflect increased risk to economic growth and corporate profits from the ongoing trade conflict between the United States and China. Check out this week’s Weekly Market Commentary: Tweaking Our Forecasts for more details, and please see our new digital version on LPL.com 

Weekly Market Performance. Last week, investors endured another volatile five-day stretch as the combination of trade uncertainty, plunging global bond yields, and conflicting messages between the United States and global economies further pressured stock prices. Check out our new Weekly Market Performance report for more context on last week’s market action.

 

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.

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 # 1-884376