Market Update: Tues, Jun 23, 2020 | LPL Financial Research


Global stock markets rebound from overnight declines. S&P 500 Index futures were down nearly 1.5% overnight after a key advisor to President Trump expressed uncertainty about the China trade deal, but they swung back to gains following reassurances by the president and positive manufacturing data out of Europe. The MSCI Asia Pacific Index moved higher overnight, while the Euro Stoxx 600 Index was up over 1% at midday.

Bond income still matters. Since 1977, the Bloomberg Barclays US Aggregate Bond Index has shown a price decline 21 times, but it has posted a total return loss only three of those times. The difference? Coupon income. Income provides an important buffer against price losses. But with the average coupon on the index at just over 3%, and just over 2% for Treasuries, income is now historically low. For more discussion of the income environment, see today’s LPL Research blog.

Recovery well underway. The US economy has made impressive progress in recent weeks. As the economy re-opens, the way we assess the recovery has changed, and we will need new tools to gauge progress. We updated our “Road to Recovery Playbook” with a slightly cautious near-term stock market outlook, with more on our new approach coming soon. Read more on today’s LPL Research blog.

COVID-19 news. New cases jumped by more than 31,000 Monday, more than 50% above the week-ago level. All of the increase can be attributed to eight states: Arizona, California, Florida, Georgia, Mississippi, Ohio, South Carolina, and Texas. More targeted restrictions are likely, but we do not expect state-wide lockdowns to be re-imposed (Source: COVID-19 Tracking Project).


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