Global Trade Slows Further

Economic Blog
August 29, 2019

World trade volumes contracted in June and the second quarter as the United States-China trade conflict impacted the amount of goods crossing borders. On a quarter-over-quarter basis, trade has contracted for three consecutive quarters.

This is not too surprising given the current trade environment. The slowdown in global trade has been significant since President Trump first slapped tariffs on washing machines in February 2018, and followed up with tariffs on Chinese imports in March 2018. As shown in the LPL Chart of the Day, Global Trade Has Slowed Significantly, world trade volumes have tumbled from 5-6% annual growth to a slight decline in just 16 months, even though some trade activity is being shifted to other countries in Southeast Asia.

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Consumer Confidence Defies Pessimism

Economic Blog 
August 28, 2019

U.S. consumers are feeling especially empowered these days, despite growing pessimism about the economic outlook.

As shown in the LPL Chart of the Day, Consumer Confidence Pushes Through Trade Uncertainty, the Conference Board’s Consumer Confidence Index fell to 135.1 in August. Still, that’s the fifth-highest reading of the economic cycle, an impressive feat given trade tensions and other global headwinds.

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Market Update: Wed, Aug 28, 2019 | LPL Financial Research

Daily Insights

Global stocks decline. U.S. stocks are modestly lower this morning, following global stocks’ cues amid a wave of Brexit headlines and continued anxiety around the U.S.-China trade dispute. The S&P 500 Index is about 5% away from record highs, yet recent volatility has felt especially uncomfortable amid magnified stocks’ swings in both directions. Continue reading

Market Update: Tues, Aug 27, 2019 | LPL Financial Research

Daily Insights

Some carryover from Monday’s rally. Stocks continue to rally after President Trump’s more conciliatory tone on China at the G7 summit, despite conflicting reports on recent conversations with Chinese officials. Although compromise may not come soon as both sides dig in, the fact that more talks are on the calendar is encouraging, while the president’s “job interview” in November 2020 looms large as it may up the pressure to cut a deal. Continue reading

When Powell Speaks, Markets Listen

Market Blog
August 26, 2019

When Federal Reserve (Fed) Chair Jerome Powell speaks, markets listen. Friday, August 23, the markets had a new opportunity to gauge the Fed’s direction when Powell gave a closely watched speech at the annual gathering of central bankers in Jackson Hole, WY. This was Powell’s first opportunity to follow up on the release of the minutes from the Fed’s July 30-31 policy meeting, where the Fed cut its main policy rate for the first time since the 2007-2008 financial crisis. The minutes revealed general consensus among the meeting attendees that a cut was necessary, as well as a lively debate about the overall future path of rates.

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Leading Indicators Signal Growth Ahead

Economic Blog

U.S. leading indicators rebounded in July, a good sign for the durability of the expansion.

The Conference Board’s Leading Economic Index (LEI) rose 0.5% month over month, the biggest gain since September 2018, and above consensus expectations for a 0.3% increase. As shown in the LPL Chart of the Day, Leading Indicators Slowing But Growing, the LEI climbed 1.6% year over year. Continue reading

Market Update: Fri, Aug 23, 2019 | LPL Financial Research

Daily Insights

Jackson Hole. Today, policymakers are scheduled to kick off the Federal Reserve’s (Fed) annual Economic Policy Symposium in Jackson Hole, WY. During the conference, Fed Chair Jerome Powell and other Fed members are expected to speak on the future of U.S. monetary policy, a sensitive topic for markets right now. Continue reading