LPL Market Signals: Rally Time?

Friday, October 29, 2021

Rally Time?

Stocks are back at new highs and the S&P 500 Index is up more than 20% for the year with more than two months to go in 2021. This week in the LPL Market Signals podcast, LPL Financial Strategists Jeff Buchbinder and Ryan Detrick discuss why there could still be some fuel left in the tank for stocks to move higher. They also touch on hyperinflation, the latest out of Washington, and how earnings season is doing so far.

Jack Says Hyperflation and the Latest from Washington

Twitter founder and CEO Jack Dorsey tweeted he sees hyperinflation happening. Jeff notes LPL Research doesn’t see this scenario taking place and Jack could simply be talking his book regarding this large cryptocurrency portfolio. Yes, consumer prices are running at up 5% from a year ago, but as we work through the supply chain issues, prices will likely come back and a massive inflation spike like the 1970s remains quite unlikely. Then, Jeff and Ryan discuss how taxes (to help pay for the massive new spending bills) likely aren’t going to go up nearly as much as everyone expects. This pleasant surprise could be one reason stocks have done so well lately.

The Best Month of the Year

Ryan notes that November is the best month of the year and the seasonal tailwinds aren’t something to ignore this year. Jeff claims some of the strong gains in October could be stealing some from the usually strong end of year timeframe, but still—a few more percentage points of gains in 2021 is likely. Ryan adds that another reason to be optimistic is we are seeing broader participation from stocks and this underlying strength could be a bullish sign.

Another Strong Earnings Season

Third-quarter earnings season is off to a great start, with more than 80% of companies beating estimates.  Potentially, a high 30% growth rate is possible. Ryan notes it isn’t quite as strong as the past two quarters, but this is still really good. Jeff adds that this week many of the big tech names are set to report, so what they have to say will go a long way in how strong this earnings season will be. Lastly, with many of the industrials and consumer staples coming up, these groups will likely be more impacted by supply chains issues, so the numbers could be tougher to impressive versus financials which aren’t as impacted by supply chain issues.

You can watch the full video 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.

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 # 1-05207441