Market Update: Mon, Jan 27, 2020 | LPL Financial Research

Daily Insights

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%.

Earnings resilience. With 88 S&P 500 companies having reported, fourth quarter 2019 earnings growth is tracking to a 1.9% year-over-year decline, 0.5% above the prior week. While the earnings beat rate at 73% is typical at this point, the slight increase in 2020 S&P 500 earnings estimates since December 31 is encouraging amid progress on trade and global growth stabilization. It’s still early in the reporting season and 2020 has barely begun, but our confidence in this year’s earnings has increased slightly in recent weeks.

The week ahead. The economic calendar ramps up this week with several important releases, which could distract investors from global affairs. Investors will get an initial look at fourth quarter gross domestic product (GDP) on Thursday, and the Federal Reserve is scheduled to kick off its first policy meeting of 2020 on Tuesday. About 150 S&P 500 companies are also slated to report fourth quarter results in one of the busiest weeks of the earnings season. Internationally, investors will be watching the Eurozone’s fourth quarter GDP report, as well as manufacturing and services activity data out of China.

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 professional prior to investing. The economic forecasts set forth in this material may not develop as predicted.

U.S. Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk.

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.

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 that is not an LPL affiliate, please note LPL 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 # 1-942794