Market Update: Wed, Sep 4, 2019 | LPL Financial Research

Daily Insights

Encouraging headlines. Encouraging headlines across the world have sparked a rally in global stocks this morning. U.K. lawmakers voted to take control of Parliament’s agenda, allowing them to introduce a bill that would delay the October 31 Brexit deadline. Tensions also calmed in Hong Kong after chief executive Carrie Lam withdrew a bill allowing extraditions to China. Markets don’t like uncertainty, and today’s developments help temper unusually high geopolitical uncertainty around the globe. However, several global issues remain unresolved, so more volatility could be ahead for U.S. stocks.

Manufacturing muddles through. U.S. manufacturing contracted in August for the first time since January 2016, according to the Institute for Supply Management’s (ISM) manufacturing Purchasing Managers’ Index (PMI). While manufacturing plays a smaller role in the economy than it once did, it remains a bellwether for corporate profits, and deteriorating trends in manufacturing played a role in our recent reduction in our 2019 S&P 500 Index EPS estimate to $165. Despite incremental weakness in manufacturing, we still expect economic growth and EPS growth in the U.S. in the second half of 2019 driven by consumer spending strength. On the LPL Research blog today, we’ll dig into ISM’s August report and what manufacturing signals for the economic outlook.

LPL Research on CNBC. Senior Market Strategist Ryan Detrick was on CNBC Trading Nation yesterday with Michael Santoli to discuss September seasonality and more. You can watch the full interview here.

 

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