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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.
Is Another Black Monday Coming?
by Ryan Detrick of LPL Financial,
Tomorrow is the 29-year anniversary of the crash of 1987. After the dust settled, the S&P 500 fell an incredible 20.5% on Monday, October 19, 1987, for the single worst day ever for the index – earning the well-deserved nickname Black Monday.
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.
Has Anything Changed?
by Anthony Valeri of LPL Financial,
A strong July employment report caused Treasury yields to spike higher, but the broader message from the bond market has not changed. Improvement in economic data will need to exhibit greater consistency to exert meaningful upside pressure to bond yields.
European Banks: Neither a Borrower Nor Lender Be
by Matthew Peterson of LPL Financial,
· Banks everywhere are under pressure from the low interest rate environment. · Corporate financing in Europe goes through banks, not the capital markets, making banks more important to the system. · Monetary policy in Europe has just begun to increase bank lending, which historically has resulted in higher stock prices for banks, though the full impact of negative interest rates is difficult to determine.
See You in September?
by John Canally of LPL Financial,
As of Monday, August 1, 2016, the fed funds futures market is pricing in less than a 20% chance that the Federal Reserve (Fed) raises rates by 25 basis points at the conclusion of its next policy meeting on September 21, 2016. This assessment is the result of the Federal Open Market Committee (FOMC) statement released on July 27, 2016, which provided no hint of a hike as soon as September, and a weaker than expected report on gross domestic product (GDP) in the first half of 2016, released on Friday, July 29, 2016.
High-Yield Municipal Update
by Anthony Valeri of LPL Financial,
High-yield municipal bonds have benefited from broad bond market strength in 2016, but are now more subject to the path of interest rates over the remainder of the year. As we mentioned in our Midyear Outlook 2016: A Vote of Confidence publication, we expect more muted returns across the bond market, and high-yield municipal bonds may see a slowdown after a robust 8.9% total return through July 22, 2016.
Follow the Leaders
by John Canally of LPL Financial,
The Conference Board Leading Economic Index (LEI), one of our Five Forecasters, provides a valuable monthly guidepost regarding where we are in the economic expansion. The latest reading on the LEI, based on June 2016 data, revealed that the index climbed just 0.7% since June 2015. The month-over-month change in the LEI has been negative half the time over the past year, while the year-over-year change has decelerated from a high of 6.7% in July 2014 to the 0.7% today.
Midyear Outlook 2016: Believing in the Potential of the U.S. Economy
by John Canally of LPL Financial,
For the first half of 2016, the U.S. economy—as measured by real gross domestic product (GDP)—is on track to grow at around 2.0%. Looking out into the second half of the year, aided by a dollar tailwind, stable oil prices, steady consumer spending, record high household net worth, and a slowing, but still solid labor market, the U.S. economy may grow between 2.0% and 2.5%. But even at just over 2%, actual GDP is growing faster than potential GDP (the maximum pace the economy can grow without causing inflation), taking up slack and slowly pushing up wages and inflation.
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.
What's Ahead for the U.K. & Europe?
by John Canally of LPL Financial,
Following the United Kingdom’s (U.K.) decision to leave the European Union (EU) in a referendum held on June 23, 2016, there are still many questions regarding the future of the U.K.’s relationship with the EU and other impacts throughout Europe.
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 & Bonds
by Anthony Valeri of LPL Financial,
High-quality bond strength following the Brexit vote is likely to persist if history is any guide. Flight-to-safety buying, which is typical in response to market or geopolitical shocks, propelled Treasuries to strong gains in response to voters in the United Kingdom (U.K.) deciding to leave the European Union (EU).
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.
Brexit Breakdown
by John Canally of LPL Financial,
Financial markets reacted swiftly and sharply on Friday, June 24, 2016, to the unexpected decision by the United Kingdom (U.K.) to leave the European Union (EU) in a nationwide referendum held on June 23, 2016. Ahead of the vote, most financial market participants and political observers thought that the U.K. would vote to remain in the EU, and markets spent most of the day Friday adjusting to the reality that the U.K. will likely leave, sending equity prices lower, and bond and gold prices higher. The uncertainty in the markets, tightening financial conditions, and other potential impacts to the U.S. economy may influence the Federal Reserve’s (Fed) path of future rate hikes.
Municipals Buck the Seasonal Trend
by Anthony Valeri of LPL Financial,
Municipal bonds have thus far bucked the trend of typical headwinds in June. The Barclays Municipal Bond Index has returned 1.1% month to date through June 17, 2016, a stark contrast to the -0.55% total return the Barclays Municipal Bond Index has averaged in June over the past 10 years. The index has posted positive returns only three times over that time span—a remarkably poor batting average for any interest bearing sector—illustrating the consistency of June challenges until this year.
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?
Trading Places: The Brexit, the U.K., and the EU
by Matthew Peterson of LPL Financial,
This week’s vote in the United Kingdom (U.K.) on remaining in the European Union (EU) could have significant implications for both parties. Polling data suggest that the vote will be very close, though historically, in similar situations people vote retain the status quo in greater proportions than the polling suggests.
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.
ECB Corporate Purchase Program
by Anthony Valeri of LPL Financial,
The European Central Bank's (ECB) Corporate Securities Purchase Program (CSPP) is set to begin on June 8. This program was initially announced in March, and brings corporate bonds into the European quantitative easing (QE) program, in an attempt to lower debt costs broadly. Though the first purchases are yet to be made, European corporate yields have fallen significantly, showing that the market has priced in its impact, making further broad gains less likely. Still, the low-yield environment is likely to push foreign cash toward the relatively higher yields in U.S. markets, potentially keeping a lid on U.S. Treasury and corporate yields as well.
High-Yield Bonds Still Dependent on Oil
by Anthony Valeri of LPL Financial,
High-yield has continued its run of strong performance that started in mid-February 2016, but continues to remain highly dependent on the path of oil prices. Second quarter 2016 economic growth prospects have also helped, but have taken a backseat to the impact of oil. Fair valuations, rising defaults, and continued dependency on oil suggest caution after an impressive rebound since mid-February 2016.
GDP Gap
by John Canally of LPL Financial,
How fast the economy is growing at any given point in time is important to know. Citizens, policymakers, investors, central banks, and, in election years, politicians, all want to know how we’re doing. These days, they want to know instantly. The problem is, getting a good read on how fast an economy is growing, in real time, is difficult at best. Trying to ascertain how the sectors of an economy (manufacturing, consumer, business spending, construction, etc.) are performing is even more difficult. Yet, despite all the issues, every day, week, month, or quarter, we obsess over the economic data and the pace and composition of growth in the U.S. (and global) economy.
Results 201–250
of 396 found.
