As the clock strikes 11 p.m. in London (midnight in Brussels) on January 31, 2020, the United Kingdom (U.K.) will end its 47-year membership in the European Union (E.U.) when the U.K.’s withdrawal from the E.U., known as Brexit, becomes official. Continue reading
Levels of support. The S&P 500 Index is less than 2% off its all-time closing record following Thursday’s reversal, though you wouldn’t know it from the headlines. Nevertheless, there has been deterioration in global indicators such as copper prices and U.S. Treasury yields, and the chance for a pullback is always a risk in markets. Continue reading
The Super Bowl Indicator suggests stocks rise for the full year when the Super Bowl winner has come from the original National Football League (now the NFC), but when an original American Football League (now the AFC) team has won, stocks have fallen. We would be the first to admit that this indicator has no connection to the stock market, but “data don’t lie”: The S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 53 Super Bowl games when NFC teams have won. Continue reading
The U.S. economy notched an average year of growth in 2019.
Gross domestic product (GDP) rose 2.1% in the fourth quarter of 2019, according to Bureau of Economic Analysis data released today. Net exports added 1.5 percentage points, its largest contribution to quarterly GDP growth in 10 years, as global demand picked up and domestic demand waned. Consumer spending contributed 1.2 percentage points, while inventories subtracted 1.1 percentage points. Business spending was a drag on growth for the third straight quarter. Continue reading
More volatility. U.S. stocks are lower this morning as another wave of coronavirus outbreak fears curbed risk appetite. European stocks are being hit harder this morning after the Bank of England kept its policy rate unchanged (amid speculation of a rate cut), and the United Kingdom’s January 31 exit from the European Union neared. Continue reading
A new wave of global uncertainty has spooked investors, and some have feared it could put too much strain on a weakened global economy without more central bank intervention.
As shown in the LPL Chart of the Day, the 2-year U.S. Treasury yield fell to 1.46% on Tuesday, below the current fed funds rate range of 1.5–1.75%. Two-year yields, which we view as a proxy for expected monetary policy, typically follow the fed funds rate unless fixed income investors expected a rate change in the near term. Continue reading
Market fears subside. U.S. stocks are higher for a second day after the S&P 500 Index jumped 1% on Tuesday. Equity investors’ fears around the coronavirus outbreak seem to be subsiding for now, thanks to a round of encouraging earnings reports released over the past few days. Continue reading
Fears that the deadly coronavirus would spread further around the globe intensified Monday and led to the biggest one-day drop in the S&P 500 Index since October 8, 2019. In fact, it was the first time the index moved 1% in either direction since early October—spanning 71 trading days. Not only that, but the index’s streak of 30 consecutive days without back-to-back declines, tying the longest such streak in over 60 years as shown in the LPL Chart of the Day, came to an end. Stocks had been eerily calm. Continue reading
Stocks rebound. U.S. stocks are rebounding this morning as tensions simmer around a dangerous outbreak of the coronavirus. China implemented travel restrictions on Hong Kong to contain the virus after extending its Lunar New Year holiday to February 9 earlier this week. Continue reading
Stocks slide. U.S. stocks are down this morning as China has continued to take measures to stop the spread of a dangerous virus. There are still few indications that this outbreak could have significant global economic impacts, but the sudden influx of reports has spooked investors enough to sell U.S. stocks at record highs. The S&P 500 Index has dropped about 1% from a record high and is poised for its first back-to-back decline since early December. The 10-year U.S. Treasury yield has also declined to a three-month low of 1.61%. Continue reading