The S&P 500 Index corrected nearly 20% from the September peak until December 24 before staging a furious rally of 19%. What could happen next? A well-deserved pullback would be perfectly normal, and in fact, is probably needed before another surge higher can occur. Now the $64,000 question: Would a pullback be a retest of the December lows, a 10% correction, or something more modest?
The Federal Reserve (Fed) heard the market’s alarm and shifted its stance, but the U.S. yield curve hasn’t woken up yet.
Pessimism has rapidly infiltrated Main Street’s outlook, according to the latest Federal Reserve (Fed) Beige Book. LPL Research maintains a straightforward but informative indicator called the Beige Book Barometer (BBB), which helps us gauge Main Street’s sentiment by looking at how frequently key words and phrases appear in the Beige Book.
China exports surged in early March, according to China. Official data released over the weekend showed that exports surged 39.9% year over year in the first nine days of March, while officials also said that it’s normal for there to be fluctuations around the Lunar New Year holiday and that Beijing is “full of confidence” about the next stage of trade growth. Continue reading
Global growth concerns outweigh positive trade developments, sending stocks deep into the red
US: S&P 500 Index -2.2%, Dow -2.2%, Nasdaq -2.5%
Europe: STOXX Europe 600 -1.0%, German DAX -1.2% France CAC 40 -0.7%, U.K. FTSE 100 0.0%
Asia: Japan Nikkei -2.7%, China Shanghai Composite -0.8%, Korea KOSPI -2.6%
Rates/Commodities: 10-Year Treasury yield -13 basis points to 2.63%, WTI crude oil +1.5%, COMEX gold: 0.1%
Investors largely ignored further progress in U.S.-China trade negotiations this week, instead focusing on economic data and cuts to gross domestic product growth forecasts from the European Central Bank and the OECD, which provided reason enough to lock in gains following the equity markets’ rally since the beginning of the year.
February’s smaller-than-expected jobs gain may put investors on edge, but underlying details show there isn’t much to fret about.
This Saturday, March 9, 2019, marks the 10-year anniversary of the end to the worst bear market for U.S. stocks since the Great Depression.
ECB changes guidance, acknowledges weaker economy. In what we would call a bit of a surprise, the European Central Bank (ECB) this morning said it now expects to maintain interest rates at current levels at least through the end 2019 after lowering its GDP growth expectations to 1.1% from 1.7%, and its inflation forecast to 1.2% from 1.6%. Continue reading