Welcome to December. It’s the most wonderful time of the year for U.S. stocks (based on history). Since 1950, the S&P 500 Index has climbed an average of 1.5% in December, its second-best monthly performance over that period. The last two months of the year have historically been the strongest for U.S. equities, and the seasonal tailwind has already appeared. The S&P 500 rose 3.4% in November, notching 11 record highs along the way.
New month, same issues. U.S. stocks are unchanged this morning as trade and geopolitical headlines turn negative. President Donald Trump announced he would reinstate tariffs on steel and aluminum imported from Argentina and Brazil, and China unveiled its first measures of retaliation against the United States in response to the United States’ recent law supporting Hong Kong protestors. Neither development is significant for the U.S. economy at first glance, but the headlines could be enough to unnerve investors with stocks near record highs.
Checking in on technicals. Technical analysis suggests a modestly bullish bias toward stocks, but that doesn’t mean volatility is not a risk. In this week’s Weekly Market Commentary: Technicals Check-In, we look at market momentum, global participation, and technical support as reasons to think gains may not be over for 2019.
More Record Highs. U.S. stocks rose for the seventh time in eight weeks as investors took cues from a new batch of optimistic trade headlines. U.S. fixed income gained for a third straight week as well. Read Weekly Market Performance: More Record Highs for performance summaries of all the major indexes.
The week ahead. This week, investors will receive several clues about the U.S. economy’s performance in November. Markit and Institute for Supply Management Purchasing Managers’ Index data for the U.S. manufacturing and services sectors will be released today and Wednesday. The November jobs report is slated to come out Friday. Internationally, investors will be watching for revised Eurozone and Japan gross domestic product (GDP) data, which will come out on Tuesday and Thursday, respectively.
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.
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