LPL Market Signals: Some Pros and Cons

Market Blog

Wednesday, April 21, 2021

This week on the LPL Research Market Signals podcast, Chief Market Strategist Ryan Detrick discusses some recent potential market worries, but also several long-term signals that suggest any weakness may be a buying opportunity. Jeff Buchbinder was off this week to celebrate his birthday, but we’ll get a full review of his presents next week. Lastly, it is Earth Day this week, a fitting week to discuss Sustainable Investing with LPL Research Head of Sustainable Investing Jason Hoody.

Three Things That Scare Us. After more than an 80% rally and 23 more new highs in 2021, some potential worries are creeping up. On the sentiment front, various investor polls and put/call ratios are showing extreme optimism, which could be bearish from a contrarian point of view. Additionally, recent manufacturing and service data was the best in years, again suggesting a higher bar, as everyone now knows the economy is roaring back. Lastly, Ryan discusses stretched valuations and how this bull market is closely tracking the 2009/10 market, which, as the chart shows, grew tired right about now.

View enlarged chart.

Another Talking Dog Joke. After last week’s hit talking dog joke, Ryan broke out another talking dog joke. We won’t give it away, but we could be on to something here—people seem to like talking dog jokes!

Four Reasons to be Bullish. Ryan also discusses four reasons to expect higher prices this time a year from now, making any weakness, a potential buying opportunity. For starters, the first quarter saw the S&P 500 Index up 5.8%, which is right in the sweet spot for the rest of the year’s returns to be strong. Also, the S&P 500 didn’t violate the December lows in the first quarter, yet another signal that returns could be strong by year end. Ryan also discusses how strong 12-month returns tend to resolve higher. Along with the other signals, market breadth is historically strong—another good sign for markets.

View enlarged chart.

Earth Day is Here. Jason Hoody joined the podcast to discuss ways that LPL Financial is helping our advisors and their clients learn more about sustainable investing, and there’s no better time to do it that Earth Day.

On April 22, the world will celebrate the 51st Earth Day, a chance to learn about the environmental challenges we face today, ways to become more involved, and opportunities to use one’s personal choices to elicit positive environmental and social changes. Many investors are increasingly adopting a sustainable investing approach in order to align their investment portfolio with companies seeking to make a positive impact. It was a fun conversation on a sector of the investable world that is growing quickly.

You can watch the full video below and directly on our YouTube channel. Please be sure to subscribe to the LPL Research YouTube channel so you don’t miss anything! Also, if you like our channel, please give us a positive review—it helps more than you know!



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