Market Update: Wed, Nov 6, 2019 | LPL Financial Research

Daily Insights

Stocks creep higher. U.S. stocks are modestly higher on a quiet morning for headlines. In the U.S., investors are digesting mixed economic data and third-quarter earnings reports. The S&P 500 Index has closed at four record highs in the past seven trading sessions, fueled by optimistic trade headlines and encouraging Federal Reserve (Fed) commentary.

NEW Street View video. In the newest Street View video, Sr. Market Strategist Ryan Detrick discusses last week’s “mid-cycle adjustment” by the Fed and explains why the Fed is willing to pause on more rate action. At less than 2 minutes in length, Happy Halloween from the Fed is easy to share with clients and add to your digital media. Look for more videos on the Resource Center.

Productivity declines. Nonfarm productivity unexpectedly slid 0.3% in the third quarter, its first quarterly decline since the fourth quarter of 2015. Productivity growth was solid in late 2018 and early 2019 as last year’s business spending surge increased efficiencies in U.S. companies. Capital expenditures growth has stalled, though, and we’re now seeing productivity growth fade. As the cycle ages, we’d like to see productivity pick up because it helps lift overall growth and keep employer costs low.

Steady services activity. The U.S. services sector has steadily expanded this year, even as trade fears drag down manufacturing. The Institute for Supply Management’s (ISM) non-manufacturing (services) Purchasing Managers’ Index (PMI) climbed to 54.7 in October, its 117th straight month in expansionary territory (above 50). On the LPL Research blog today, we’ll take a look at last month’s solid ISM services report, and highlight why U.S. manufacturing and services activity has diverged recently.

 

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