Market Update: Wed, Jan 22, 2020 | LPL Financial Research

Daily Insights

Stocks rebound. U.S. stocks are higher this morning, rebounding from the S&P 500 Index’s 0.3% decline that kicked off this holiday-shortened week. Investors are watching a stream of earnings reports this morning as the fourth quarter earnings season heats up. Global stocks are also higher on news that China is taking measures to contain an outbreak of a deadly respiratory virus.

Safe-haven rush. Even though equity risk appetite has seemingly recovered, fixed income investors are still eyeing safe-haven assets. The 10-year U.S. Treasury yield fell to 1.77% this morning after closing at a seven-week low on Tuesday. The 10-year yield has struggled to break above 2% since falling below that level in July 2019. Ebbing U.S.-China trade tensions were a promising development for yields, but it now looks like more clarity may be needed before the benchmark yield crosses 2%.

Another look at election years. Last week on the LPL Research blog, we took a closer look at how stocks have performed during an election year. We found that since 1940, the S&P 500 hasn’t been lower during an election year when an incumbent president has been up for reelection. Today, we’ll highlight patterns we found when looking at stocks’ average path in past reelection years, one of which suggests equities could flounder over these next two quarters. Check out the LPL Research blog post later today for more details.

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