Market Update: Fri, Jan 31, 2020 | LPL Financial Research

Daily Insights

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. The first key technical level of S&P 500 support we are watching is 3,030, which was resistance from July through October 2019. That’s also right above the S&P 500’s 200-day moving average of 3,011, which has served as support in prior sell-offs.

Brexit becomes official. Later today, the United Kingdom’s (U.K.) exit from the European Union (E.U.), or “Brexit,” will become official. However, there will be little fanfare in Parliament and few signs of immediate change when this deadline arrives. Now, investors will likely focus on the details of the U.K.’s future relationship with the E.U. as the two sides sort out what a post-Brexit future will look like. We’ll outline the next steps today on the LPL Research blog.

Core PCE growth rises. Consumer inflation, measured by the Federal Reserve’s (Fed) favorite gauge, core personal consumption expenditures (PCE), picked up for the first time in four months. Core PCE, which excludes food and energy prices, grew 1.6% year over year in December, below the Fed’s 2% target. On Wednesday, Fed Chair Jerome Powell messaged that policymakers are comfortable with the current level of policy in boosting inflation to their target. However, it may take a few months for core PCE inflation to tick up toward 2% with global uncertainty currently still high.

49ers or Chiefs? One of the popular stock market axioms is the Super Bowl Indicator. Simply put, stocks historically have performed better when the NFC wins the big game versus the AFC winning. Taking it a step further, the S&P 500 gained 19% for the calendar year the five times the 49ers won the Super Bowl, versus flat the year the Chiefs won. We discuss this more in detail on our special-edition LPL Research blog this morning. 

LPL Research on Fox Business. LPL Financial Senior Market Strategist Ryan Detrick was in New York City this week and joined Liz Claman on Fox Business to discuss markets. You can watch the full interview here.


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