LPL Market Signals: We Don’t Expect a Delta Derailment

Market Blog

Thursday, August 19, 2021

In this week’s LPL Market Signals podcast the strategists discussed the latest increase in cases of COVID-19 from the Delta variant. The uptick has their attention economically, although inventory replenishment and pent-up consumer demand still stand as key reasons they remain bullish on the economic recovery. Widespread lockdowns are extremely unlikely and peaks in cases in some of the regions hit earliest by the Delta variant are encouraging.

A blowout second quarter earnings season is almost fully in the books and LPL Research sees continued strong earnings growth ahead. Positive guidance, rising estimates, sizable upside surprises on the revenue line, and the aforementioned need for inventory restocking all support a positive earnings outlook for the rest of 2021 and beyond.

LPL Research has raised its S&P 500 earnings per share forecasts by 5-6% on August 16 to $205 for 2021 and $218 for 2022. Higher earnings expectations were the primary driver of their raised year-end S&P 500 fair value target for 2021 to 4,650-4,700 (up from 4,400-4,450).

Finally, the strategists discuss differences between the current environment and the stagflation era of the 1970s in response to some investor concerns about recent high inflation readings. LPL Research continues to believe that elevated inflation pressures will prove transitory.

Tune In Now

Listen to the entire podcast to get the LPL strategists’ views and insights on current market trends in the US and global economies. To listen to previous podcasts go to Market Signals podcast. You can subscribe to Market Signals on iTunesGoogle Podcasts, or Spotify and find us on the LPL Research YouTube channel.

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!



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.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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 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 # 1-05181679