Market Update: Fri, Oct 18, 2019 | LPL Financial Research

Daily Insights

Meandering near highs. The S&P 500 Index is meandering just below record highs, poised for its second week of gains amid trade and geopolitical breakthroughs. Global stocks have risen recently as well, with the Euro Stoxx 50 Index at its highest levels since January 2018 and the Japanese Nikkei near its December 2018 highs. While these improvements are noteworthy and help our bullish case for stocks, the relative trend between markets still favors U.S. equities over developed-market equities.

China’s economy continues to slow. China’s gross domestic product grew 6% year over year in the third quarter, the slowest pace of growth since at least 1992 and below consensus expectations for 6.1% growth. On the other hand, China’s industrial production rose 5.8% year over year in September, its fastest pace of growth in three months. Some of China’s data has improved recently, but the overall theme in most reports is a gradual slowdown in the world’s second-largest economy, exacerbated by trade tensions.

LEI’s September update. The Conference Board’s Leading Economic Index’s (LEI) September update is scheduled to be released later this morning. The LEI, which is a composite of 10 leading indicators, is one of our favorite economic gauges to monitor, as the LEI has fallen negative year over year before all recessions since 1955. We’ll cover the LEI’s September update later today on the LPL Research blog.

LPL Research on StockCharts.com. LPL Financial Senior Market Strategist Ryan Detrick was on The Final Bar recently with Dave Keller of StockCharts.com. They focused on three charts that LPL Research is watching right now. You can watch the interview here.

 

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