Market Update: Wed, Oct 2, 2019 | LPL Financial Research

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.

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