Market Update: Mon, Dec 23, 2019 | LPL Financial Research

Daily Insights

Bright spirits. It’s the week of Christmas, and investors’ spirits are bright. The S&P 500 Index has climbed 2.6% so far this month, poised for its best December since 2010. The calendar is quiet through the end of the year, and we’re now in one of the S&P 500’s strongest weeks historically. Since 1950, the S&P 500 has gained an average of 0.6% in the 52nd calendar week of the year.

 Durable goods data disappoints. Consumer and business demand contracted in November, according to preliminary durable goods data for November. Durable goods orders unexpectedly fell 2% last month, missing consensus estimates for a 1.5% rise. Orders for nondefense capital goods (excluding aircraft), which we use to gauge capital expenditures, fell 1.1% year over year, showing business spending is still tepid.

 Profit growth is key. Clarity from the phase one trade deal with China and United Kingdom election results could help shift stock market performance drivers more toward investing fundamentals in 2020. We expect stocks to appreciate in line with earnings growth next year, which we think justifies benchmark-like equity allocations. Find out more in the new Weekly Market Commentary: Profit Growth Key for 2020 Stocks. (client approved)

Seasonal lift. The S&P 500 rose for the 10th time in 11 weeks and the 10-year U.S. Treasury yield touched a six-week high as trade progress buoyed risk sentiment. For a review of all major index performance, see the latest Weekly Market Performance: Seasonal Lift. (client approved)

The week ahead. This week, the U.S. economic calendar is sparse as 2019 winds down. The stock market will close early December 24 and will be closed December 25. Then, initial jobless claims are scheduled to be released on Thursday. Internationally, key data points include retail sales, employment, and industrial production data for Japan, and China’s industrial profits on Thursday. German retail sales data is slated for Friday.

IMPORTANT DISCLOSURES

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.

If your advisor is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are:

Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit

Member FINRA/SIPC

For Public Use – Tracking # 1-930568