Drifting higher. U.S. stocks are drifting higher once again this morning, with the S&P 500 Index poised for its third straight record high close. Risk sentiment has improved recently amid a new batch of optimistic trade headlines, and the absence of other market-moving news around the globe. Continue reading
November 26, 2019
It took nearly 15 months, but the Russell 2000 Index finally broke out to a new 52-week high. On November 25, the Russell 2000 gained an impressive 2.1% to close at its highest level since October 2018. Continue reading
Stocks little changed. U.S. stocks are little changed this morning after the S&P 500 Index notched its 11th record high since the end of October. The benchmark gained 0.75% on Monday after China announced it would tighten rules on intellectual property. Continue reading
Earnings update. Third quarter S&P 500 Index earnings barely budged after last week’s wave of retail results. S&P 500 profits are tracking to a 2.2% year-over-year decline last quarter, with over 480 S&P 500 companies having reported. While that year-over-year change is nearly 2 percentage points higher than September 30’s estimate, the upside is slightly less than recent trends. Continue reading
November 22, 2019
October’s leading indicators show the domestic economy could be bottoming.
The Conference Board’s Leading Economic Index (LEI) declined 0.1% in October, following a downwardly revised 0.2% decline in September. As shown in the LPL Chart of the Day, the LEI grew 0.3% year over year last month, tying June 2016 for the slowest growth of the expansion. Historically, year-over-year declines have preceded every U.S. recession since 1955, so we monitor this metric in our Five Forecasters.
Technicals still lean bullish. U.S. stocks are slightly higher this morning amid trade headlines, but the S&P 500 Index is still poised for its first weekly loss since early October. We have yet to see a concerning breakdown in technicals, as it looks like stocks are simply consolidating strong gains from the past several weeks. Continue reading
November 21, 2019
An upbeat economic outlook may be edging out elevated downside risks in the Federal Reserve’s (Fed) decision-making.
Minutes from the Fed’s October meeting showed policymakers discussed both dynamics at length, as they have at several meetings this year. The Fed ended up reducing the fed funds rate by 0.25%, citing low inflation and downside risks as reasons to lower the policy rate for a third time this economic cycle.
Conflicting signals. U.S. stocks are little changed this morning as conflicting trade headlines pour in. The S&P 500 Index declined on November 20, notching its first string of consecutive declines since October 8, after reports suggested the United States and China may not finalize a limited trade agreement by the end of the year. Continue reading
November 20, 2019
“Be fearful when others are greedy, and greedy when others are fearful.” – Warren Buffett
The S&P 500 Index has trended higher in an unusually persistent fashion recently. The benchmark has notched 10 record-high closes over the past four weeks, including four straight through November 18.
On the Recession Watch. With the S&P 500 Index at record highs, our outlook remains optimistic, but we don’t want to be complacent. We take a look at some of our favorite leading indicators to see what they say about the economic expansion and its accompanying bull market. Continue reading