Market Update: Thurs, Dec 5, 2019 | LPL Financial Research

Daily Insights

Stocks rebound. Stocks are up this morning, adding to the S&P 500 Index’s 0.6% gain on Wednesday. Trade sentiment has shifted once again after a Wednesday report indicating that the United States and China are on track to reach a limited trade agreement by December 15 (when higher tariffs on $160 billion in Chinese imports are scheduled to kick in). Equities around the world are following trade cues these days, and U.S. stocks are benefitting from seasonal tailwinds as well.

Services activity falls. The Institute for Supply Management’s gauge of services activity fell to 53.9 in November, near a multi-year low of 52.6 reached in September. While the headline number was uninspiring, leading data in the report showed signs of a rebound. ISM’s measure of services employment jumped to a four-month high, while new orders in the services sector climbed to a three-month high. Optimism around a trade deal could continue to lift demand in service industries, which constitute a large share of gross domestic product.

Jobless claims drop after creeping higher. Claims for unemployment benefits fell to 203,000 in the week ending November 30, a seven-month low. Initial jobless claims have crept higher over the past several weeks, causing some concern among investors looking for cracks in an otherwise resilient labor market. Jobless claims’ four-week average climbed to a six-month high in November, but we have yet to see the significant pickup in claims that has occurred before past recessions. We’ll get more details on the state of the U.S. job market in the November jobs report, which is scheduled to be released on Friday.

The outlook for global equities. It has been a banner year for global equities. The MSCI ACWI Index of global stocks has climbed 19.2% this year, poised for one of its best years in the current bull market. There’s potential for even more upside in international equities in 2020 with a number of unresolved global issues on the horizon. We’ll outline our thoughts on global stock markets today on the LPL Research blog, and dig into what regions could lead the charge in 2020.



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