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The Bull Market Appears Alive and Well
by Burt White of LPL Financial,
The steady bull market—now the second largest—continues. The Dow just had its third nine-day win streak of 2017, which hasn’t happened within a single year since 1955. Can the rally continue? While longer-term technicals do look very healthy, a closer look suggests that it has been a historically long time since even a modest correction, thus increasing the chances of a rise in volatility soon.
Checking in on Some Trump Trades
by Burt White of LPL Financial,
Checking in on some “Trump trades.” The election outcome and resulting expectations for fiscal policy have caused several shifts in market leadership toward areas most sensitive to these policies. Policy is not the only factor to consider when evaluating these investments, but it is a very important one.
2017 Stock Market Outlook: Gears are Turning, but Parts May Need Grease
by Burt White of LPL Financial,
Earnings are the key to 2017 stock market outlook. S&P 500 earnings passed an important milestone in 2016, returning to growth in the third quarter after mildly contracting for several quarters during an extended mid-cycle earnings recession.
Can't Stocks and Bond Yields Just Get Along?
by Burt White of LPL Financial,
Surging bond yields have not spooked stock market investors. The latest sharp move higher in bond yields has caused stock market investors to ask the question, At what point do higher interest rates potentially begin to hurt stock prices?
Election Playbook
by Burt White of LPL Financial,
With the election fast approaching, we present our election playbook. With Election Day just 15 days away, and the three presidential debates behind us, investors want to know what the upcoming change in power in Washington might mean for their portfolios.
Taking Stock of Technicals and Sentiment
by Burt White of LPL Financial,
We take a closer look at market technicals and sentiment this week with the historically volatile second half of October upon us. Although there has been some near-term volatility and equity weakness, the longer-term technicals on equities continue to look very strong.
Five Forecasters: Few Warning Signs
by Burt White of LPL Financial,
The Five Forecasters favor the continuation of the current economic expansion and bull market. The Five Forecasters are five indicators that, collectively, have historically signaled increasing fragility of the U.S. economy and a transition to the late stage of the economic cycle, with increased potential of an oncoming recession.
EM Earnings: Beginning to Emerge
by Burt White of LPL Financial,
By nature, emerging markets (EM) have greater risks, but they also have attractive attributes relative to developed foreign markets. For most markets, earnings have been stagnant while valuations—what investors are willing to pay for those earnings—have increased.
Dividend Bubble?
by Burt White of LPL Financial,
Dividend stocks have been thriving in the low interest rate environment. Dividend-paying stocks, which we define as stocks with higher dividend yields than the broad equity market, have garnered support as investors increasingly use stock dividends as a substitute for fixed income in the low interest rate environment.
Midyear Outlook Campaigning for More Investment
by Burt White of LPL Financial,
We continue to expect mid-single-digit returns for the S&P 500 in 2016, consistent with historical mid-to-late economic cycle performance. As discussed in our just released Midyear Outlook 2016: A Vote Of Confidence, we expect those modest second half gains to be derived from mid- to high-single-digit earnings growth over the second half of 2016, supported by steady U.S. economic growth and stability in oil prices and the U.S. dollar.
Q2 2016 Earnings Preview: Better Times Ahead?
by Burt White of LPL Financial,
The earnings recession will likely continue with second quarter results, which will begin with a small handful of companies reporting this week (July 5–8, 2016). The Thomson-tracked consensus estimate for S&P 500 earnings per share (EPS) is calling for a 4% year-over-year drop, which would mark the fourth consecutive quarterly decline (by FactSet’s count the streak would reach five). Perhaps the best thing to say about this streak, the longest since 2008, is that the drop will likely confirm that the 5% year-over-year decline in the first quarter of 2016 marked a trough.
Brexit Reflections
by Burt White of LPL Financial,
The United Kingdom’s (U.K.) unexpected decision to leave the European Union (EU) sent markets reeling on Friday (June 24, 2016). The S&P suffered a 3.6% decline, its worst day of 2016. But that loss was muted in comparison to the 8.6% drop in Europe’s EURO STOXX 50 Index—its biggest one-day loss in 30 years—or the nearly 9% drop in the British pound versus the U.S. dollar to a 31-year low.
Overcoming A Wall Of Worries
by Burt White of LPL Financial,
With weaker than expected jobs growth in May, the Federal Reserve’s (Fed) recent disappointing economic forecast, negative interest rates around the globe, and the Brexit, the list of worries for investors continues to pile up. The U.S. economic recovery will turn seven at the end of this month, but very few realize that or feel like it has helped them. In the face of all the bad news, the S&P 500 is still only 2.8% away from a new all-time high. So maybe things aren’t so bad?
Brexit: Should They Stay or Should They Go?
by Burt White of LPL Financial,
June 23, the day the United Kingdom votes on whether to remain in the European Union, is circled on every calendar on every trading desk globally. The vote will likely be very close, and while the most recent opinion polls show the likelihood of a “leave” vote increasing, though with a margin of error and a sizable undecided vote, the outcome is still unknown.
Jam-Packed June
by Burt White of LPL Financial,
June is filled with major market events that may go a long way toward determining the near term direction of the equity markets. They include an OPEC meeting, central bank meetings for the Fed, ECB and Bank of Japan, and the "Brexit" vote, a referendum on whether the U.K. will remain in the European Union.
Spinning Our Wheels
by Burt White of LPL Financial,
The one-year anniversary of the S&P 500’s all-time high took place on May 21, 2016. Stocks have largely been spinning their wheels for the past year. The S&P 500 has failed to return to its May 21, 2015, record high for 12 months. Stocks have actually been spinning their wheels for even longer, considering the S&P 500 is at the same level as it was on November 18, 2014—an 18-month stretch.
What Might Trump the Election Year Pattern?
by Burt White of LPL Financial,
This week we look at what the upcoming presidential election may mean for markets in 2016. Following last week’s somewhat surprising news that both Ted Cruz and John Kasich had withdrawn from the race, Donald Trump will be the Republican presidential nominee. Given that Trump has no formal policy record or political experience of any kind, this election cycle is, needless to say, unusual. Markets do not like uncertainty, and Trump undoubtedly brings that to the table.
Is Sell in May Just a Cliche?
by Burt White of LPL Financial,
“Sell in May and go away” is probably the most widely cited cliché in stock market history. May is upon us, which every year sparks a barrage of Wall Street commentaries, media stories, and investor questions about the popular stock market adage. This week we tackle this widely cited seasonal pattern, but with a couple of twists thrown in to add some new perspective.
Value Comeback?
by Burt White of LPL Financial,
Value stocks have staged a comeback versus growth after a long losing streak. Based on the Russell 1000 style indexes, growth has outpaced value for the better part of the last decade. Other than the period between April 2012 and July 2013, it’s been all growth all the time since 2006.
Taking Stock After the Rally
by Burt White of LPL Financial,
Stocks have had quite a nice run. Since the February 11, 2016 lows the S&P 500 has gained 14%. The rally has been driven by many factors?—?chief among them, better U.S. economic data, higher oil prices, the Federal Reserve’s (Fed) slower rate hike timetable, increased confidence in China, and more stimulus from overseas central banks. These factors have enabled stocks to trade more on fundamentals than fear, and have pushed the S&P 500 to just 2.4% below its all-time high. Here we assess the likelihood that the rally continues from this point forward, and, if so, how much further it might have to go.
Emerging Market Earnings: Is the Tide Turning?
by Burt White of LPL Financial,
After disappointing investors last year, emerging market earnings forecasts may finally be consistent with what can be delivered. Emerging markets (EM) have underperformed U.S. markets since the summer of 2011. The reasons are numerous, including concerns about the Chinese economy (the largest and most important among EM), the strength of the U.S. dollar, and the decline in commodity prices, just to name a few.
Q1 2016 Earnings Preview: No More Excuses
by Burt White of LPL Financial,
First quarter earnings results will not be very exciting, but the earnings trajectory may be at a trough. We would love to say that this earnings season, which begins on April 11, 2016 (unofficially), will bring better results than recent quarters, but that appears very unlikely.
Market's March Madness
by Burt White of LPL Financial,
The NCAA Men’s College Basketball Final Four is set. North Carolina, Oklahoma, Syracuse, and Villanova are headed to Houston, TX to determine this year’s hoops national champion. In that spirit, we share our own Final Four for the stock market this year: China, earnings, the Federal Reserve (Fed), and oil. Stock market investors may not storm the court at the end of this year, but we do continue to expect mid-single-digit total returns for the S&P 500 in 2016 based on our assessment of our “Final Four.”
Europe - Not Enough Growth
by Burt White of LPL Financial,
Forecasts for European corporate earnings have become increasingly pessimistic. Analysts have reduced calendar year 2016 expectations to just under 3% earnings per share (EPS) growth, currently from nearly 20% as of the end of September 2015. Even though European stock prices have declined, the collapse in growth expectations suggests that these markets are still fairly valued; few, if any, bargains have been created. Recent aggressive monetary policy by the European Central Bank (ECB) may have boosted stock prices, but the implications for corporate earnings are much less certain.
Will Eight be Great for the Bull?
by Burt White of LPL Financial,
The bull market turns seven. Last Wednesday, on March 9, 2016, the bull market officially celebrated its seventh birthday. During that seven-year period, the S&P 500 nearly tripled, gaining 194% in price and producing a total return of 241%. Although our expectations for the stock market in 2016 are for only modest S&P 500 gains, we do not see the warning signs that have signaled the end of past bull markets and would not be surprised at all if the current bull market celebrates its eighth birthday one year from now.
Data-Driven Perspective on a Rough Start to 2016
by Burt White of LPL Financial,
It has been a rough start to 2016 for the stock market. In fact, it’s been one of the worst starts to a year in the history of the S&P 500. This week we look at how stocks have done historically after other similarly bad starts, compare current fundamental and technical conditions to prior bear market lows, and discuss some potential catalysts that could help turn stocks around. While recession odds have risen (we place the odds at about 30%), we do not expect the S&P 500, down 12.5% from 2015 highs, to enter a bear market.
Fear February After Jittery January?
by Burt White of LPL Financial,
Don’t worry about the January Barometer, which says, “As goes January, so goes the year.” Here we discuss the reliability of this indicator and several factors that may lead to better performance in February. We see opportunities in the stock market in 2016, but suggest caution in the near term as we await clarity on the key issues pressuring investor sentiment.
Five Forecasters: Few Warning Signs
by Burt White of LPL Financial,
The Five Forecasters still favor the continuation of the current bull market and no recession. The Five Forecasters, which we first introduced in 2014, are five indicators that, collectively, have historically signaled the increasing fragility of the U.S. economy and a transition to the late stage of the economic cycle and an oncoming recession.
Any Bulls Left?
by Burt White of LPL Financial,
The number of bulls is dwindling. In periods of extreme market volatility such as we have experienced in recent weeks—and Friday, January 15, 2016, in particular, when the Dow was down over 500 points at one point before paring losses—we find it helpful to try to take some of the emotion out of our investment decisions. As difficult as that can be at times, this approach can help us reduce the chances of selling at the bottom, even though the natural reaction for many is to panic and hit the sell button.
What Does the High-Yield Sell-Off Mean for Stocks?
by Burt White of LPL Financial,
High-yield bond weakness has led investors to fear that a recession or bear market may be forthcoming. Widening of high-yield bond spreads (the spread between yields on high-yield bonds and comparable U.S. Treasuries) preceded the start of the stock market downturns in 2000 and 2008, causing many to ask if the latest bout of high-yield weakness portends another downturn. Here we try to answer that question by looking at characteristics unique to the high-yield bond market and prior periods of similar high-yield weakness.
No Pain No Gain: 2016 May Require Tolerance for Volatility
by Burt White of LPL Financial,
Gains in 2016 may require tolerance for volatility. Stocks historically have offered a tradeoff of higher return for higher risk, the gain of more upside than high-quality bonds versus the pain of market volatility and losses. For the last few years, U.S. stock markets provided below-average pain, while still providing strong returns. Between October 2011 and July 2015, the S&P 500 Index went nearly four years without a “correction” of more than 10%, while climbing an average of 20% a year.
Tragedy In Paris
by Burt White of LPL Financial,
Our thoughts are with the victims of Friday’s terrorist attacks in Paris. Events like this stir up many powerful emotions, including anger, fear, sadness, confusion, and regret, and these emotions are not easily suppressed. It is difficult to shift our attention away from this tragedy and toward the financial markets in times like this, but it is our responsibility to do so. Here we look at the potential stock market impact of Friday’s tragedy.
Global Earnings Update: Europe and Japan Coming up Short
by Burt White of LPL Financial,
Earnings overseas have generally not kept up with the U.S. We spend a lot of time dissecting earnings season in the U.S. because we believe earnings are the single biggest driver of stock prices over the long run. But earnings are not just important for U.S. stocks, they are also important for stocks overseas. This week we provide an earnings update in Europe and Japan, where results thus far have mostly fallen short of those in the U.S.
Corporate Beige Book
by Burt White of LPL Financial,
According to our new Corporate Beige Book, China has been a popular subject of discussion among corporate management teams this earnings season. Similar to the Federal Reserve’s (Fed) Beige Book, a qualitative assessment of the U.S. economy and each of the 12 Fed districts, conference call transcripts for third quarter 2015 company earnings reports can be used to create a Corporate Beige Book—a window into corporate America.
Results 1–50
of 94 found.
