Earnings season producing modest–but many–upside surprises. With 200 S&P 500 Index companies having reported so far, third quarter 2019 earnings growth is tracking to a 3.8% year-over-year decline. That pace is just 1% above September 30, 2019, levels, a small amount of upside considering nearly 80% of S&P 500 companies have beaten forecasts. In terms of guidance, estimates for the next 12 months have fallen 1% since September 30–a typical quarterly reduction–amid trade uncertainty, softening U.S. manufacturing activity, and slowing international growth.
Poised for record highs. Stocks are higher this morning on another wave of optimistic trade and geopolitical headlines, and the S&P 500 is poised to notch its first record high since July. Today, stocks are rising globally after the European Union (E.U.) granted a three-month extension to the United Kingdom’s deadline to leave the E.U. (Brexit). U.S. stocks also got a sizeable boost on October 25 after U.S. officials announced they were close to finalizing some sections of the limited trade agreement with China.
Market could play tricks. The stock market has been hovering near record highs despite an assortment of economic and geopolitical risks. In the spirit of Halloween, in this week’s Weekly Market Commentary: Market Tricks and Treats, we discuss some of the factors that might spook the markets between now and year-end, including trade tensions, bond markets, U.S. manufacturing activity, fear of a Fed policy misstep, and global geopolitical concerns.
S&P 500 hits record highs. U.S. stocks gained for a third straight week, and on Friday the S&P 500 Index briefly pushed past its July record closing high before closing slightly below that level. Weekly Market Performance: S&P 500 Brushes Record High covers the major indexes for equities, sectors, fixed income, currency, and commodities.
The week ahead. This week’s calendar is unusually packed. The most notable event is the Federal Reserve’s (Fed) policy announcement on October 30, followed by Fed Chair Jerome Powell’s post-meeting press conference. U.S. investors will also get a look at updated Conference Board Consumer Confidence Index data (on October 29), Personal Consumption Expenditures (PCE) data (October 31), third-quarter gross domestic product (October 31), ISM manufacturing data (November 1), and the October nonfarm payrolls report (November 1).
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 # 1-909558