Market Update: Fri, Aug 30, 2019 | LPL Financial Research

Daily Insights

More choppy action? After falling for four consecutive weeks, it appears U.S. stocks have a good chance of finishing higher this week with the S&P 500 Index up 2.7% through Thursday’s close. Technically, the S&P 500 continues to trade in a relatively tight range – trapped between its 200-day moving average (2,804) and 50-day moving average (2,924). Until it breaks out of this range, continued choppy action appears likely.

Good riddance, August. August was a rough month for equity investors with a lot of volatility, which is par for the course from a historical perspective. The bad news, though, is that September is historically the worst month for U.S. stocks. Since 1950, the S&P 500 has dropped an average of 0.5% in the month. On the LPL Research blog today, we’ll take a closer look at August’s trading and examine what that could mean for stocks going forward.

Mixed signals. Economic data continues to send mixed signals about the state of U.S. inflation. Core personal consumption expenditures (PCE) jumped 0.2% month over month in July, its fourth straight month of solid gains after a tepid start to the year. Still, core PCE, which excludes food and energy prices, rose 1.6% year over year, below the Federal Reserve’s (Fed) 2% target. We’ve seen an uptick in consumer inflationary pressures recently amid a resurgence in domestic consumer activity. However, other data shows global demand continues to weaken, a trend that could counter larger companies’ pricing power and complicate the Fed’s mandate of promoting stable inflation.

 

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