The incredible volatility continues, with the S&P 500 Index now in one of its worst bear markets ever, along the way making the quickest move from an all-time high to down 30% at only 22 days. What is a long-term investor to do? Continue reading
Stocks rebound. U.S. stocks are higher this morning, rebounding from the S&P 500 Index’s 0.3% decline that kicked off this holiday-shortened week. Investors are watching a stream of earnings reports this morning as the fourth quarter earnings season heats up. Global stocks are also higher on news that China is taking measures to contain an outbreak of a deadly respiratory virus. Continue reading
Consumer inflation has surged back after a strong quarter of U.S. consumer demand.
As shown in the LPL Chart of the Day, Consumer Inflation Picks Up in July, the core Consumer Price Index (CPI), which excludes food and energy prices, rose 2.2% year over year last month, its fastest pace of growth in six months. Core CPI has climbed 0.3% month over month in June and July, its biggest two-month gain since 2005.
The June jobs report was solid.
Nonfarm payrolls rose 224,000, according to data released July 5. As shown in the LPL Chart of the Day, Strong June Payrolls Gain Surprises Investors, the rise in jobs last month handily beat estimates for a 160,000 gain.
Stocks rally. The S&P 500 Index gained 4.4% last week, its best week since November, on increasing hopes for Federal Reserve (Fed) rate cuts. Friday’s weaker-than-expected May jobs report sealed the deal for financial markets, as fed fund futures are now pricing in a 99% chance of a rate cut by the end of the year. A cut does look increasingly likely, but we believe that fed fund futures markets remain too aggressive given on-going fiscal stimulus, an economy that has been growing near 3%, and a near 50-year low in the unemployment rate. However, policy uncertainty remains the biggest risk to the economic outlook, and the bond market has increasingly signaled that monetary policy may be too tight for a drawn out trade dispute. Continue reading