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).
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any 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 information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
All index and market data are from FactSet and MarketWatch.
This Research material was prepared by LPL Financial, LLC.
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.
- 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- 05025408