Daily Insights
Stocks opened higher. US equities reversed earlier losses following a contentious US presidential debate Tuesday night that raised more questions of a potentially contested election. On the flipside, House Speaker Nancy Pelosi noted positive discussions with US Treasury Secretary Steven Mnuchin regarding an upcoming COVID-19 stimulus deal. Asian markets were mixed overnight; European shares are little changed.
Raucous debate, but not for markets. S&P 500 futures fell overnight, but the US dollar is up this morning, sending opposite signals on any market impact from Tuesday night’s presidential debate, and both well within the range of normal market movements. There were three key questions for us heading into the debate: 1) Will we learn anything new about policy? 2) Will it meaningfully change the election odds? and 3) Will it increase market participants’ sense of uncertainty around the election? The answers are no, no, and maybe. For a deeper dive into our view of the market implications of last night’s debate, see today’s LPL Research blog.
Confidence is on the rise. The Conference Board’s Consumer Confidence Index jumped to 101.8 from August’s 86.3, beating estimates by the most since November 2011 and delivering the largest month-over-month increase since April 2003. Not surprisingly, the majority of the previous largest monthly increases occurred at the end of a recession or beginning of a new expansion. This is yet another clue the recession is likely over. Given the consumer makes up two-thirds of gross domestic product (GDP), this could bode well for the recovery.
Technical update. Stocks are pointing lower again today, following a 0.5% loss for the S&P 500 Index on Tuesday. The index has failed to recapture its 50-day moving average (3355) over the past few days, but continues to have strong support at last week’s lows just above 3200.
COVID-19 news. New case growth in the United States tumbled 24% week over week to below 37,000, bringing the seven-day average down by 2% to 42,182, though that decline may be overstated due to data collection issues (source: COVID Tracking Project). Hospitalizations unfortunately went the other direction Tuesday, jumping 24% week over week to the highest level since September 3. The daily rate of positive tests in New York City exceeded 3% for the first time in several months. Regeneron said its antibody cocktail may reduce virus levels and symptoms in non-hospitalized patients with mild cases.
LPL Research in the Media
LPL Financial Chief Market Strategist Ryan Detrick was quoted in Yahoo! Finance about the election and interviewed on Nasdaq Trade Talks to discuss the recent volatility.
IMPORTANT DISCLOSURES
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.
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.
- 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 1-05061498