Stocks Start the New Year with a Bang
US: S&P 500 Index +1.6%, Dow +1.3%, Nasdaq +1.4%
Europe: STOXX Europe 600 +0.5%, German DAX -0.9% France CAC 40 +1.9%, U.K. FTSE 100 +3.1%
Asia: Japan Nikkei +0.1%, China Shanghai Composite +0.6%, Korea KOSPI +1.2%
Rates/Commodities: 10-Year Treasury yield -3 basis points to 2.70%, WTI crude oil +3.0%, COMEX gold: +1.9%
After posting their worst December in 87 years, stocks bounced back in spectacular fashion in January as the S&P 500 Index rose 2.0% this week through Thursday to finish January 7.9% above its year-end closing level.
As investors sift through conflicting signals on economic growth, the January jobs report is an encouraging sign that the U.S. economy is on solid footing.
Nonfarm payrolls rose 304K in January, handily beating consensus estimates for a 165K gain. Through January, payrolls posted their biggest two-month increase since July 2016, even though December’s payroll gains were revised down to 222K.
LPL Research on Yahoo! Finance. Senior Market Strategist Ryan Detrick was on Yahoo! Finance yesterday talking Super Bowl and stocks. Watch the full interview here, and view the related LPL Research blog post from last Friday here.
Technical update. The equity bounce continues, with most equity indexes up at least 1% this week. In fact, the Dow has a shot at being up 6 weeks in a row. Technically, the S&P 500 Index continues to consolidate above its 50-day moving average, but potential resistance lies just ahead of the 200-day moving average near 2,740. We are extremely encouraged by the now 15% bonce since the December 24th low, but things are quite stretched and some type of potential correction would be perfectly fine and healthy. Continue reading
We maintain our cautious tactical view of European equities amid lackluster economic growth and political uncertainty. Euro-area gross domestic product (GDP) rose just 0.2% during the fourth quarter, or 1.2% year over year, with Italy falling into recession and Germany, amid auto sector weakness, coming very close. Continue reading
What a year it has been. After the worst December for stocks in 87 years that contributed to the worst fourth quarter since the 2008–09 financial crisis, stocks have bounced back in spectacular fashion. In fact, with a day to go, stocks are looking at their best first month of the year in 30 years.
Fed day. All eyes are on the Federal Reserve’s (Fed) interest-rate announcement and press conference today for signals on future policy after a volatile December. Fed fund futures are pricing in about a 70% probability that the central bank will keep rates unchanged in 2019, while the Fed’s December dot plot shows policymakers expect two rate hikes this year. Continue reading
All eyes are on the Federal Reserve’s (Fed) interest rate announcement and press conference today for signals on future policy after a volatile December.
Investors have increasingly positioned for a Federal Reserve (Fed) pause, which could portend a shift in fixed income markets. Fed fund futures are pricing in about a 70% probability that the Fed will keep rates unchanged for the rest of 2019, and the market’s dovish tilt has weighed on short-term rates.
Treasury yields steady following new issuance, ahead of Fed meeting. Treasury yields are little changed this morning following an $81 billion round of two-year and five-year note issuance that pushed the short-term rates up four basis points from Friday’s close but saw healthy demand. Continue reading
Jobless claims have dropped to a 49-year low. Based on historical trends, this could signal that a U.S. economic recession is further off than many expect.