Earnings season is here again, as we’ll get reports from 57 S&P 500 Index companies over the next five days.
A quick look at the numbers, as shown in the LPL Chart of the Day, Earnings Lull Expected to be Temporary, reveals that this round of earnings is expected to be uninspiring. Continue reading
Daily Insights
China posts its slowest growth in 27 years. China’s gross domestic product (GDP) grew 6.2% year over year in the second quarter, the slowest pace since 1992 and 0.2% below the first quarter growth rate. Continue reading
Stocks Reach New Milestones as the Fed Stays Accommodative
US: S&P 500 Index +0.8%, Dow +1.5%, Nasdaq +1.0%
Europe: STOXX Europe 600 -0.8%, German DAX -2.0% France CAC 40 -0.4%, U.K. FTSE 100 -0.6%
Asia: Japan Nikkei -0.3%, China Shanghai Composite -2.7%, Korea KOSPI -1.1%
Rates/Commodities: 10-Year Treasury yield +8 basis points to 2.12%, WTI crude oil +5.5%, COMEX gold: +0.4%
Overall, U.S. stocks had an uneventful week in terms of volatility, with major indexes gaining less than one percent. The Dow Jones Industrial Average did close above 27,000 for the first time, while the S&P 500 Index and Nasdaq Composite also reached fresh highs. Continue reading
“Don’t fight the Fed.” — Marty Zwieg
After Federal Reserve (Fed) Chair Jerome Powell’s congressional testimony this week, it appears at least a 25 basis point (.25%) cut is in the cards on July 31. This would be the first rate cut since 2008, and it would come after nine consecutive 25 basis point hikes beginning in December 2015.
Daily Insights
27,000 comes before 3,000. The Dow closed above 27,000 for the first time ever, while the S&P 500 Index missed 3,000 by a fraction of a point on Thursday, although both made new all-time highs yet again. Continue reading
Daily Insights
Dovish Fed comments support global equity markets. Federal Reserve (Fed) Chair Jerome Powell’s testimony to Congress yesterday and the release of the minutes from the Fed’s June policy meeting confirmed that the Fed is eyeing a potential rate cut in July to insulate the economy against shocks from trade and slowing global growth. Continue reading
Fed fund futures are pricing in a 25% chance of a 50 basis point (0.50%) rate cut at the Fed’s July meeting. In Fed Chair Jerome Powell’s July 10 Congressional testimony, a congressperson asked what economic factors would justify a 50 basis point rate cut. Powell effectively dodged the question, saying that policymakers look at a broad range of data when making rate decisions. Still, the idea of a steep rate reduction has gone mainstream. Continue reading
Let’s get one thing straight: Market pullbacks, corrections, and bear markets happen.
Last year was a perfect example of this: The S&P 500 Index endured five separate 5% pullbacks throughout the year, and a nearly 20% bear market correction from the September peak until December 24. (We consider a pullback 5% off the recent highs, a correction 10% off the recent highs, and a bear market is 20% off the recent highs.)
Daily Insights
Stocks reverse earlier losses after Powell testimony. Federal Reserve (Fed) Chairman Jay Powell testifies on Capitol Hill today, starting with the House followed by the Senate tomorrow. Continue reading
The June jobs report was solid.
Nonfarm payrolls rose 224,000, according to data released July 5. As shown in the LPL Chart of the Day, Strong June Payrolls Gain Surprises Investors, the rise in jobs last month handily beat estimates for a 160,000 gain.