Daily Insights
Stocks break out. After trading in a 4% range for the entire month of August, the S&P 500 Index finally broke above its 50-day moving average amid signs of progress in the U.S.-China trade dispute. The benchmark rose more than 1% for the second day in a row, closing less than 2% from all-time highs set in late July. Continue reading
Market Blog
September 05, 2019
We remain fans of diversification, including geographic diversification for suitable equity portfolios. Sticking with that approach has been trying in recent years, however.
As shown in the LPL Chart of the Day, Struggles for International Stocks Continue, stocks in developed foreign markets, represented by the MSCI EAFE Index, have trailed those in the United States significantly and consistently for the past decade. The story is the same for emerging market (EM) stocks.
Daily Insights
More U.S.-China talks scheduled. The S&P 500 Index is set for a second day of gains on news that lead trade negotiators will meet in early October in Washington, D.C. Global equities got a boost from the news, including a more than 2% gain for Japan. European markets are firmly in the green. However, odds of a major breakthrough still appear low given structural issues and lines in the sand from both sides. At this point, we would expect any progress to support stocks given widespread skepticism, in addition to generally favorable fundamentals and an accommodative Federal Reserve (Fed). Continue reading
Daily Insights
Encouraging headlines. Encouraging headlines across the world have sparked a rally in global stocks this morning. U.K. lawmakers voted to take control of Parliament’s agenda, allowing them to introduce a bill that would delay the October 31 Brexit deadline. Continue reading
Economic Blog
September 04, 2019
U.S. manufacturing contracted in August for the first time since January 2016 as trade uncertainty continued to weigh on the sector.
The Institute for Supply Management’s (ISM) manufacturing Purchasing Managers’ Index (PMI), fell to 49.1 versus consensus expectations of 51.3, a meaningful decline from July’s 51.2 reading (above 50 is considered expansionary territory).
Market Blog
September 03, 2019
First and foremost, our thoughts are with all of those that were impacted by Hurricane Dorian over the Labor Day holiday and all those that are still in its path.
Many have asked us what stocks tend to do after a major hurricane hits the United States. Given we had category 4 and 5 hurricanes last year, this question unfortunately seems to come up more than anyone would like.
Daily Insights
Brexit volatility. Global stocks are modestly lower this morning, declining after their best week since June (according to the MSCI All-Country World Index) amid a wave of Brexit headlines. U.K. Prime Minister Boris Johnson threatened to hold a general election on whether or not the United Kingdom should leave the European Union (“Brexit“) if Parliament votes to delay the October 31 deadline. Continue reading
Market Blog
August 30, 2019
August has a reputation as a volatile month, and it sure delivered this year. After nearly two months without a 1% close higher or lower for the S&P 500 Index, market turbulence re-surfaced in August. Over the past month, we’ve not only seen the worst three days of the year, but many 1% swings in both directions.
Daily Insights
More choppy action? After falling for four consecutive weeks, it appears U.S. stocks have a good chance of finishing higher this week with the S&P 500 Index up 2.7% through Thursday’s close. Technically, the S&P 500 continues to trade in a relatively tight range – trapped between its 200-day moving average (2,804) and 50-day moving average (2,924). Continue reading
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.