Market Update: Wed, Aug 28, 2019 | LPL Financial Research

Daily Insights

Global stocks decline. U.S. stocks are modestly lower this morning, following global stocks’ cues amid a wave of Brexit headlines and continued anxiety around the U.S.-China trade dispute. The S&P 500 Index is about 5% away from record highs, yet recent volatility has felt especially uncomfortable amid magnified stocks’ swings in both directions. History suggests U.S. stocks may be due for a rebound: The S&P 500 has dropped for four straight weeks, and it hasn’t posted a five-week decline since 2011. However, investors have a lot of uncertainty to digest these days, so we wouldn’t be surprised to see volatility continue.

Brexit headlines resurface. U.K. Prime Minister Boris Johnson announced plans to suspend Parliament activity for five weeks starting September 12. This latest move could increase the probability of a no-deal United Kingdom exit from the European Union (Brexit), as it effectively stops U.K. lawmakers from debating Brexit plans or discussing motions to delay a Brexit decision deadline of October 31. Even though Brexit headlines have been just temporary speedbumps for U.S. stocks, these latest developments add to the already heightened global uncertainty that has made investors especially jittery these past few weeks.

Confident consumers. U.S. consumers are feeling especially empowered these days, despite growing pessimism about the economic outlook. The Conference Board’s Consumer Confidence Index posted its fifth-highest reading of the economic cycle in August, an impressive feat given trade tensions and other global headwinds. On the LPL Research blog today, we’ll dig into recent consumer confidence readings, and analyze what this could mean for the composition of U.S. economic growth going forward.

 

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