Market Update: Wed, Oct 9, 2019 | LPL Financial Research

Daily Insights

A partial trade deal. Trade is dominating headlines once again, just a day before U.S. and China officials are slated to kick off face-to-face trade discussions in Washington, D.C. U.S. stocks are higher today on news that China is willing to accept a partial trade deal with the U.S. in order to avoid more tariffs, including tariffs scheduled to take effect in October and December. The reports indicate that China and the U.S. likely won’t agree to a broader trade deal at this meeting, but any agreement could be important thawing before the two sides meet again at the Asia-Pacific Economic Cooperation meeting in November. At the very least, any trade progress helps curb elevated global uncertainty, which should be a positive for risk assets.

A scary October? October has lived up to its volatile reputation so far. The S&P 500 Index has declined at least 1% in three of six trading sessions this month after a calm September. October’s rough start has many investors on edge, especially because the month is known for spectacular crashes–specifically in 1929, 1987, and 2008. However, October has quietly been one of the strongest months of the year over the past 10 and 20 years (as we highlighted in a recent blog post). It’s also the first month of the fourth quarter, which is typically a strong period seasonally for stocks. We’re not surprised to see some swings at these levels, especially as the S&P 500 creeps toward record highs.

Signs of stabilization. Economic pressure continues to build for the United States and China to reach a trade deal. There have been signs of slowing in both regions’ economies, especially in more globally sensitive sectors like manufacturing. However, China’s economic data has perked up recently, and the Organisation for Economic Co-operation and Development’s (OECD) composite leading indicators show that the Chinese economy could be turning the corner. We’ll dive into what the OECD’s leading indicators are telling us today on the LPL Research blog.

 

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 FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit

 

If your advisor is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are:

Member FINRA/SIPC

For Public Use – Tracking # 1-902865