Market Update: Mon, June 10, 2019 | LPL Financial Research

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Stocks rally. The S&P 500 Index gained 4.4% last week, its best week since November, on increasing hopes for Federal Reserve (Fed) rate cuts. Friday’s weaker-than-expected May jobs report sealed the deal for financial markets, as fed fund futures are now pricing in a 99% chance of a rate cut by the end of the year. A cut does look increasingly likely, but we believe that fed fund futures markets remain too aggressive given on-going fiscal stimulus, an economy that has been growing near 3%, and a near 50-year low in the unemployment rate. However, policy uncertainty remains the biggest risk to the economic outlook, and the bond market has increasingly signaled that monetary policy may be too tight for a drawn out trade dispute. Continue reading

Market Update: Mon, June 3, 2019 | LPL Financial Research

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U.S. futures point to slightly lower open as trade jitters continue. Asian markets were higher overnight, helped by emerging markets, but European markets are point lower at mid-day, and S&P 500 Index futures are signaling a downward nudge at open for equities with continued pressure on the 10-year Treasury yield. Continue reading

A Second Glance at First Quarter GDP

A second glance at first quarter gross domestic product (GDP) provided respite for investors fixated on negative headlines.

As shown in the LPL Chart of the Day, GDP rose 3.1% in the first quarter, according to the first revision released May 29. Although headline growth was revised down, it was still the biggest first-quarter GDP gain since 2015, showing the U.S. economy remained resilient against trade and political headwinds.

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Market Update: Thurs, May 30, 2019 | LPL Financial Research

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GDP’s first revision. Gross domestic product (GDP) rose 3.1% in the first quarter, according to the first revision, lower than the initial reading of 3.2%. Consumer spending’s contribution was revised up 0.1%, while net exports and inventories were revised down approximately 0.1%. However, business spending contribution to GDP was cut about 0.1%. Continue reading

Market Update: Wed, May 29, 2019 | LPL Financial Research

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China may weaponize rare earths. Reports from Chinese media suggest China may be considering weaponizing rare earths as a retaliatory measure in the U.S.-China trade dispute. Commentary in Chinese media included a Chinese phrase translating to “don’t say we didn’t warn you,” which is significant because it was used before the China-India and China-Vietnam conflicts. Continue reading