Daily Insights
Is this the start of October volatility? After going the entire month of September without a 1% drop for the S&P 500 Index, it fell 1.2% on the first day of October. Stocks are continuing to follow through to the downside this morning. We wouldn’t be surprised if we saw some larger swings this month, especially after the historically tranquil September. Nonetheless, over the past 20 years, October has been the third strongest month for the S&P 500 and it has been higher during a pre-election year every year since 1999. We will take a closer look at this potentially scary month later today on the LPL Research blog.
Big dip in U.S. manufacturing. The Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) fell to 47.6 in September, the lowest level since June 2009. This was weaker than expected and is another sign that trade tensions have stalled demand. Nonetheless, the PMI is a survey, and actual data from the latest durable goods and industrial production numbers would suggest the economy is quite healthy. Additionally, manufacturing makes up about 12% of overall U.S. gross domestic product (GDP), while the very healthy U.S. consumer makes up nearly 70% of GDP. As long as the consumer stays healthy, we think this recent manufacturing slowdown won’t lead to a recession. We take a closer look at the weak manufacturing number here.
LPL Research on CNBC. LPL Financial Senior Market Strategist Ryan Detrick was on CNBC’s Squawk Box with Joe Kernen talking about what could be in store in October. Watch the full interview here.
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 company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
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.
Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
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 Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking # 1-899952