Historical Perspectives on Initial Fed Rate Cuts

Stocks have benefited recently from increasing hopes of a Federal Reserve (Fed) rate cut, pulling the S&P 500 Index back to within 2% of its record high set April 30. But just how much help would a potential rate cut this summer actually provide? We began trying to answer that question here last week by looking back at similar periods in history, and we saw that stocks have historically done well after initial rate cuts in the absence of an immediate recession.

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Weekly Market Drivers | LPL Financial Research

Stocks Take a Breather After Strong Start to June

US: S&P 500 Index +0.5%, Dow +0.5%, Nasdaq +0.7%
Europe: STOXX Europe 600 +0.4%, German DAX +0.4% France CAC 40 +0.1%, U.K. FTSE 100 +0.2%
Asia: Japan Nikkei +1.1%, China Shanghai Composite +1.9%, Korea KOSPI +1.2%
Rates/Commodities: 10-Year Treasury yield +1 basis points to 2.09%, WTI crude oil -2.9%, COMEX gold: -0.1%

U.S. stocks stalled this week after posting their biggest weekly gain since November. The S&P 500 Index rose modestly in the week as investors struggled to find direction in trade headlines and conflicting economic reports. The U.S. announced a trade deal with Mexico over the weekend, propelling the S&P 500 to its best gain of the week on Monday. Continue reading

5 Things We Are Watching

Here are five things that have caught our attention recently.

  • Various stock markets around the globe are at new highs. “When you see places like Australia, Argentina, Brazil, Greece, Russia, and Switzerland all at or near new highs, you have to wonder if that global recession we keep hearing about is going to happen,” explained LPL Senior Market Strategist Ryan Detrick. “We don’t see how a place like Greece could be as strong as it has been if a global slowdown were truly around the corner.”

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Market Update: Fri, June 14, 2019 | LPL Financial Research

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Daily Insights

Equities search for direction near all-time highs. Following a sharp rally to start the month of June, the S&P 500 Index has recovered most of its losses from May and now sits just 2% below all-time closing highs. The technicals continue to support our preference for large-caps over small caps, as the Russell 2000 Index remains more than 11% off its all-time highs, and has trailed the S&P 500 by approximately 300 basis points (bps) over the past month. Continue reading

Market Update: Thurs, June 13, 2019 | LPL Financial Research

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Daily Insights

Stocks open higher on energy support. Attacks on two tankers on the Gulf of Oman are driving oil prices (+3-4%) and energy stocks higher this morning. Nothing particularly new on the trade front besides more tough talk from Chinese leaders suggesting they won’t cave to U.S. pressure. Expectations for a breakthrough at the G-20 Summit later this month may have faded a bit, though indications that the two leaders will meet in Japan and President Trump’s refusal to set a hard deadline for new tariffs could be interpreted positively. Continue reading

Market Update: Wed, June 12, 2019 | LPL Financial Research

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Daily Insights

The win streak is over. Stocks fell only slightly yesterday, but closed meaningfully off their early morning highs. In the end, the Dow snapped a 6-day win streak and the S&P 500 Index ended a 5-day win streak. After the worst month of May for the S&P 500 since 2010, stocks have bounced back nicely in June. In fact, the S&P 500 is up 4.9% so far in June, which would be the best June since 1999. Additionally, after seven trading sessions, the S&P 500 is off to its best start for any month since October 2015. Continue reading