Market Update: Fri, Feb 21, 2020 | LPL Financial Research


Investors on edge. We’ve seen signs of complacency among investors in recent weeks, but Thursday showed how investor anxiety can spike quickly. The S&P 500 Index has traded in a range of less than 2% the previous seven days, but on Thursday the VIX Index (CBOE Volatility Index) jumped more than 20% intraday before the S&P 500 recovered most of its losses.

Support levels. On further pullbacks for stocks, we see first support for the S&P 500 at the 50-day moving average (about 3% below current levels) followed by more substantial support near 3030.

Stocks opened lower. Futures are lower in the United States this morning, as a big uptick in the number of coronavirus cases in South Korea and Japan weighed on market sentiment.

Data in Europe improves. The Eurozone Flash Composite Purchasing Managers’ Index (PMI) unexpectedly jumped to a six-month high, while the UK manufacturing PMI increased the most in 10 months.

Japanese economy struggling. The Japanese manufacturing PMI shrank at the fastest pace since 2012, following this week’s news that the country’s gross domestic product shrank at an annualized rate of -6.3%.

LPL Research blog. The Conference Board released the composite value for its Leading Economic Index (LEI) yesterday, which historically has been a good predictor of future economic prospects. After months of lethargic readings, the LEI finally got the strong bounce we have been expecting, signaling a potential bottoming in the domestic economy. We discuss LEI data today on the LPL Research blog.

LPL Research on Yahoo! Finance. LPL Financial Senior Market Strategist Ryan Detrick was on Yahoo! Finance Thursday to discuss a strong earnings season, yesterday’s sell-off, and what worries us. You can watch the full interview here.



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