We are grateful for the ongoing opportunity to exchange information and ideas with LPL advisors on social media. Here are some recent shares from January, when LPL advisors focused on market trends as stocks bounced off the December lows:
Sentiment, S&P 500 turn south on trade headlines. A strong start to the week was abruptly halted yesterday after President Trump indicated he does not plan to meet Chinese president Xi Jinping ahead of the March 1 deadline. Though the two are still expected to meet at some point, the comments suggested a deal may be farther out than what was previously thought. Continue reading
LPL Research is excited to introduce our new video series, Street View, where our strategists will share top market, economic, and investment insights impacting Main Street that you can use for client conversations. This new series will feature Chief Investment Strategist John Lynch along with other members of the LPL Research team.
Big bank merger. Super-regional banks BB&T and SunTrust are combining in a $28 billion merger that will create the sixth largest U.S. bank. We have been encouraged by the pickup in loan demand and valuations in the space remain attractive in our view, though regional banks continue to struggle with a flat yield curve that has prevented the marketplace from fully realizing the value. Continue reading
Investors have been especially patient during the S&P 500 Index’s 93-day drought of record highs, especially considering the gauge has posted a new high every 12 days on average in this bull market.
However, history shows the S&P 500 typically takes some time to bounce back after swift drawdowns, like the 20% intraday slide investors experienced late in 2018. As shown in the LPL Chart of the Day, U.S. stocks have taken an average of a year to recover from intraday bear markets over the last 60 years.
Little to move markets in the SOTU. President Trump’s speech last night offered little in terms of market-moving developments. There was no mention of a national emergency declaration to build the wall, though that may still happen. There was no mention of taxes (other than references to socialism), and we continue to believe it is very unlikely that Republicans would trade tax increases for one of their priorities, or a debt limit increase. Continue reading
Diversified investors just capped one of their best months of the current economic cycle.
In January, the S&P 500 Index posted its biggest monthly gain since October 2015. At the same time, the Bloomberg Barclays Aggregate Bond Index (Agg), which represents high-quality bonds, rose 1.1%, its second-best monthly performance in 2.5 years. As shown in the LPL Chart of the Day, U.S. stocks and bonds’ strong rallies led to the best month for diversified investors since October 2011.
New LPL Market Signals Podcast. In this week’s episode of the Market Signals Podcast, LPL Financial Chief Investment Strategist John Lynch and Senior Market Strategist Ryan Detrick cover recent economic data, the Fed’s latest action on rate hikes, and potential market gains. Subscribe to the free Market Signals podcast series on iTunes, Google Play, Spotify or wherever you get your podcasts!
The Federal Reserve (Fed) just delivered a widely expected, but important monetary policy decision. On January 30, policymakers decided to leave interest rates unchanged, removing the “some further gradual (rate) increases” language used in previous statements and adding a reference to being “patient” when determining future rate adjustments.
LPL Research on CNBC. Chief Investment Strategist John Lynch was on CNBC’s Squawk Box this morning discussing market and economic drivers to watch. View the full interview here.
Update on Trade negotiations. High-level negotiations between U.S. and Chinese officials concluded late last week. Reports and interviews with top officials suggest progress was made, but enforcement remains a key concern as history suggests China could be quick to agree but slow to implement the terms of a treaty. As a result, uneven headlines are likely to continue, and existing tariffs may very well remain in place after the March1 deadline, though indications are that Presidents’ Trump and Xi are likely to meet at the end of the month, which suggests sufficient progress is being made to warrant their meeting.