Daily Insights
Pushing higher. U.S. stocks are higher, and appear poised for a third straight day of gains as investors continue to take news out of the Middle East in stride. The S&P 500 Index notched its second record high of the year yesterday, extending its rally over the past three months to 13%. Investors should be prepared for volatility, though, with stocks at records and heightened geopolitical tensions. Continue reading
The first five days of 2020 are in the books. Although the headlines have been quite scary, equities have picked up right where they left off last year. In fact, after the first five trading days of the new year, the S&SP 500 Index is up a respectable 0.65%.
Jeffrey Hirsch of The Stock Trader’s Almanac follows and tracks many interesting seasonal patterns. One that we find very interesting states that how stocks perform the first five trading days of a new year could indicate how the full year will go. Now, we’ll be the first to admit no one should invest based only on this adage, but the results have been quite compelling. Continue reading
Daily Insights
Stocks up on prospects of Iran de-escalation. Market participants remain squarely focused on the Mideast this morning. Consensus seems to be landing on de-escalation, based on the latest developments and statements from the country’s leaders, buoying investor sentiment. That stance is supported by falling WTI crude oil and gold prices on Wednesday. Continue reading
Market Blog
It was a volatile night for the U.S.-Iran conflict.
S&P 500 Index futures dipped 1.5% and global markets swung after Iran shot several ballistic missiles at U.S.-Iraqi military bases. Markets recovered their losses overnight on news that there were no American casualties, but tensions remain high in the Middle East.
As concerns over the Iran conflict continue to build, we’ve received many questions asking what this could mean for the market outlook. We discussed our initial thoughts regarding the conflict in our January 6 blog, but we believe it is important for investors to remember that there have been many times historically when stocks stood strong in times of conflict. In fact, the best ever annual Dow Jones Industrial Average gain was in 1915 during World War I. Continue reading
Daily Insights
Iran retaliates. U.S. stocks are higher this morning after a volatile night in the U.S.-Iran conflict. S&P 500 Index futures dipped 1.5% and global markets swung after Iran fired several ballistic missiles at U.S.-Iraqi military bases Tuesday night. S&P 500 futures recovered their losses overnight on news that there were no American casualties in the incident, but tensions remain high in the Middle East. Continue reading
Economic Blog
U.S. manufacturing health continued to slide, despite the United States and China moving closer to a limited trade agreement.
The Institute for Supply Management’s (ISM) manufacturing Purchasing Managers’ Index (PMI) fell to 47.2 in December 2019. As shown in the LPL Chart of the Day, December’s reading was the lowest of the economic cycle, and its fifth straight month in contractionary territory (below 50). Continue reading
Daily Insights
Stocks shrug off tensions. U.S. stocks opened little changed, shrugging off heightened geopolitical tensions after the U.S. airstrike in Iran. Investors are still evaluating what the attack could mean for financial markets and how Iran could respond. However, for now, it looks like U.S. investors think escalating tensions won’t materially impact fundamentals (a view we agree with at this point). Continue reading
The U.S. airstrike that killed the top Iranian military commander last week was a major escalation in Mideast tensions.
In fact, it would be difficult to overstate the geopolitical significance of this action. Iran likely will retaliate, possibly with attacks on American military personnel overseas.
We cannot dismiss the risk that the situation may escalate further into a broader conflict. However, from a markets perspective, we want to be careful not to overstate the potential impact. History shows that stocks have largely shrugged off past geopolitical conflicts. Continue reading
Daily Insights
Geopolitical tensions flare. U.S. stocks are lower this morning, extending Friday’s decline on news of a U.S. airstrike that killed a top Iranian military official. The attack was a major escalation in Mideast tensions, and it could have significant geopolitical implications. We cannot dismiss the risk that the situation expands into a broader conflict, but at this point, we think it’s unlikely to have a material impact on U.S. economic fundamentals or corporate profits. Continue reading
It was the best year for stocks (S&P 500 Index) since 2013 and the best year for bonds (Bloomberg Barclays U.S. Aggregate Bond Index) since 2002. The diversified investor had an especially good year: A hypothetical 60/40 portfolio with 60% in S&P 500 stocks and 40% in a diversified portfolio of bonds would have posted its best annual performance since 1997. Continue reading