Market Update: Mon, Sep 23, 2019 | LPL Financial Research

Daily Insights

Manufacturing slump deepens. The global manufacturing slump has deepened even further, according to Markit Purchasing Managers’ Index (PMI) September data released today. The most notable detail in the data was Germany’s manufacturing PMI, which unexpectedly fell to 41.4, its lowest level since 2009. Germany’s services sector also deteriorated, with activity falling to a nine-month low. European Central Bank (ECB) policymakers are trying to combat a slowdown with negative policy rates and another round of quantitative easing, but it may take fiscal intervention or a U.S.-China trade deal to lift global manufacturing out of this rout.

Central Banks Are Back. The return to central bank dominance, particularly by the Fed, has significant implications for global markets. LPL Research strategists discuss central bank policies around the world and potential impact in this week’s Weekly Market Commentary: Central Banks Are Back.

Taking punches. U.S. stocks are flat this morning following several punches to risk appetite recently. The S&P 500 Index declined 0.5% last week after a three-week winning streak as investors digested weak global economic data, a liquidity crunch in short-term money markets, an attack on Saudi Arabian oil facilities, and a Federal Reserve (Fed) rate cut. Stocks have yet to fall to the mat, though, as the S&P 500 is still about 1% away from a record high. Read the September 20 Weekly Market Performance Report: Markets Take a Punch for a review of the major equity, fixed income, currency, and commodity indexes.

The week ahead. Investors are focusing primarily on Markit manufacturing and services reports for September this morning. Other data points slated for release this week week include consumer confidence (Tuesday), housing reports, the final look at second-quarter U.S. gross domestic product (Thursday), preliminary August durable goods data (Friday), and August core Personal Consumption Expenditures data (Friday).

 

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