Iran retaliates. U.S. stocks are higher this morning after a volatile night in the U.S.-Iran conflict. S&P 500 Index futures dipped 1.5% and global markets swung after Iran fired several ballistic missiles at U.S.-Iraqi military bases Tuesday night. S&P 500 futures recovered their losses overnight on news that there were no American casualties in the incident, but tensions remain high in the Middle East. Investors should be prepared for continued volatility as the situation develops and stocks trade near record highs.
Stocks and geopolitical events. As concerns over the Iran conflict continue to build, we’ve received many questions asking what this could mean for the market outlook. We discussed our initial thoughts regarding the conflict in our Jan. 6 blog, but we believe it is important for investors to remember that there have been many times historically when stocks stood strong in times of conflict. Today on the LPL Research blog, we’ll take a look at stock performance during past geopolitical events (with the help of our friends at CFRA).
Services activity rises. U.S. services activity climbed in December, easing worries that a steady decline in global manufacturing could be weighing on other segments of the economy. The Institute for Supply Management’s (ISM) Non-Manufacturing Purchasing Managers’ Index (PMI) rose to a four-month high of 55, according to December data released Tuesday. The domestic services sector comprises a significantly higher share of economic output (relative to manufacturing), so we’re encouraged by evidence of solid demand.
Strong ADP jobs report. Automatic Data Processing’s (ADP) tally of new jobs created in December was 202,000, well ahead of the Bloomberg-tracked consensus forecast calling for 160,000 new jobs. In addition, November’s job count was revised higher by 57,000. Though this report’s track record as a predictor of the U.S. government’s more comprehensive monthly job count is spotty, this ADP report may bode well for Friday’s payrolls employment report (Bloomberg’s consensus forecast is 160,000).
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 professional 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.
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.
Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
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 insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Guaranteed | Not Bank/Credit Union Deposits or Obligations | May Lose Value|
For Public Use – Tracking # 1-935268