LPL Financial Research

Are Post-election Trends Supportive for Stocks?

Wednesday, November 23, 2022 Now that the dust has largely settled on the 2022 midterm elections, with the Democrats retaining control of the Senate and the Republicans taking a narrow majority in the House, we take a look at some … Continue reading →

The Yield Curve as a Predictor of Recessions

Tuesday, November 22, 2022 The shape of the U.S. Treasury yield curve is often looked at as a barometer for U.S. economic growth. More specifically, it reflects how the Federal Reserve (Fed) intends to stimulate or slow economic growth by … Continue reading →

Weekly Market Performance – Markets Lower Following Last Week’s Solid Showing

Friday, November 18, 2022 Index Performance View enlarged chart. U.S. and International Equities Markets Finish the Week Lower Stocks finished the week lower after last week’s nearly 6% increase for the S&P 500 Index.  Mixed retail earnings amid consumer financial … Continue reading →

Using Point & Figure Analysis to Define Market Conditions

Friday, November 18, 2022 LPL Research explores point and figure analysis and how it can be utilized to define market conditions. Despite recent overbought readings, history suggests buying pressure may not be over. Background Point and figure (P&F) analysis dates … Continue reading →

Did Retail Sales Change the Market Narrative?

Thursday, November 17, 2022 Were Retail Sales Too Good? Nominal retail sales in October rose 1.3% from a month ago, strongly beating expectations. Market watchers like to transform this nominal report into an inflation-adjusted estimate, which better corresponds to other … Continue reading →

World Cup-onomics 2022

Wednesday, November 16, 2022 We look, through an economic lens, at the biggest sports event on the planet that kicks off on Sunday November 20 in Doha, Qatar – the soccer World Cup. We take a lighthearted look at some … Continue reading →

Weekly Market Performance – Markets Higher Amid Improved October CPI

Friday, November 11, 2022 Index Performance View enlarged chart U.S. and International Equities Markets Finish the Week Higher Stocks finished the week higher amid Thursday’s cooler-than-expected Consumer Price Index (CPI) results. Moreover, Thursday’s rally was a testament to the bull’s … Continue reading →

Breaking Down the 200-Day Moving Average

Friday, November 11, 2022 The S&P 500 has been stuck below its 200-day moving average (dma) for a statistically long time. History suggests the path to recapturing the 200-dma may require more time with additional downside risk. However, after the … Continue reading →

Inflation Tide Turning

Thursday, November 10, 2022 Finally, an Encouraging Report After many months of inflation coming in above expectations, investors finally got a more favorable report with the October Consumer Price Index (CPI) data and are cheering it with a big stock … Continue reading →

Midterm Election Results Point to More Mixed Government

Wednesday, November 9, 2022 The main takeaway from election results currently is likely a mixed government, which we continue to view as market-friendly overall. There’s still some counting to do in some key races, but it remains very likely Republicans … Continue reading →

The U.S. Government Could Be on the Hook for $1 Trillion in Annual Interest Expenses

Tuesday, November 8, 2022 With voters heading out to their local voting locations today to determine the make-up of the next U.S. Congress, regardless of the outcome, lawmakers may be tasked with doing more with less. Congress—and in particular, the … Continue reading →

Weekly Market Performance – Domestic Markets Lower Amid Hawkish Fed Talk

Index Performance View enlarged chart U.S. and International Equities Domestic Markets Finish Lower But Emerging Markets Shines Stocks finished lower after Federal Reserve (Fed) Chair Powell’s comments on Wednesday caused traders to sell off domestic equities mid-week. Market participants expected … Continue reading →

Goldilocks Jobs Report Boosts Fed Slowdown Hopes

Friday, November 4, 2022 The U.S. Labor Departments nonfarm payrolls report released today showed encouraging signs for the Federal Reserve (Fed) that a “soft landing” for the economy may still be achievable. Markets responded positively to the report data that … Continue reading →

Federal Reserve Meeting Recap: Slower Pace But Higher Terminal Rate?

Thursday, November 3, 2022 The Federal Reserve (Fed) ended its two-day Federal Open Market Committee (FOMC) meeting yesterday and the outcome was broadly in line with market expectations. As expected, the Committee raised short-term interest rates by 0.75% to take … Continue reading →

Some Good News and Some Bad News for the Fed

Wednesday, November 2, 2022 Awaiting the Federal Reserve Decision While awaiting the Federal Reserve’s (Fed) interest rate decision, investors received a few pieces of relevant news this week that could likely be topics of conversation among Fed officials. Most expect … Continue reading →

How Markets Respond to Yield Curve Inversions

Tuesday, November 1, 2022 Wednesday last week, the three-month Treasury yield moved above the 10-year Treasury yield, a condition known as yield curve inversion and historically an important warning flag of elevated recession risk. But has it also been a … Continue reading →

Weekly Market Performance – Markets Climb on Resilient Earnings and Better-Than-Anticipated GDP

Index Performance View enlarged chart. U.S. and International Equities Markets Finish Mostly Higher Stocks finished higher as Q3 earnings, so far, have come in better-than-expected by market participants. So far, with help from upside surprises in the energy space, S&P … Continue reading →

What to Say About the Rebound in Growth

Thursday, October 27, 2022 What a Rebound After two consecutive quarters of negative growth, the U.S. economy grew at a 2.6% annualized rate in the third quarter, driven by a resilient consumer sector. Real personal spending, roughly 70% of the … Continue reading →

Markets Welcome New British Prime Minister Sunak

Wednesday, October 26, 2022 British bond markets and the British pound received a boost on Tuesday as Rishi Sunak, a former chancellor of the Exchequer and Chief Secretary to the Treasury, was named the new Prime Minister (PM) of the … Continue reading →

Will Higher Borrowing Costs Spook the Corporate Credit Markets?

Tuesday, October 25, 2022 With the aggressive front loading of rate hikes we’ve already seen from the Federal Reserve (Fed) this year, yields on Treasury securities are at multi-year highs. Moreover, since Treasury yields are generally used as the base … Continue reading →

Weekly Market Performance – Markets Rebound Amid Q3 Results

Friday, October 21, 2022 Index Performance View enlarged chart. U.S. and International Equities Markets Finish Higher Stocks finished higher as Q3 earnings, so far, have come in better-than-feared by market participants. As of today, 20% of S&P 500 companies have … Continue reading →

Fewest up Days Since 1974 as Volatility Continues

Wednesday, October 19, 2022 Investors who feel like there have not been many good days to cheer so far this year are correct to think that way. As shown in the LPL Research Chart of the Day, the year-to-date percentage … Continue reading →

A Lost Decade for Core Bonds?

Tuesday, October 18, 2022 The start of the 2000s was a trying time for equity investors. After the dot-com bubble burst that saw equity prices fall nearly 50% from peak to trough, it took the better part of the decade … Continue reading →

Weekly Market Performance – CPI Data Adds to Market Volatility

Friday, October 14, 2022 Index Performance View enlarged chart. U.S. and International Equities Markets Mostly Lower Stocks finished mostly lower as Thursday’s release of the September Consumer Price Index report added to market volatility.  On Thursday, the S&P 500 Index’s … Continue reading →

Investor Pessimism Still at Historic Lows

Friday, October 14, 2022 The latest weekly data from the American Association of Individual Investors (AAII) showed the percentage of individual investors who are bullish about short-term market expectations at very depressed levels (20.4%), and continued the trend of an … Continue reading →

CPI Disappoints

Thursday, October 13, 2022 Disappointing The core Consumer Price Index (CPI), which excludes food and energy, rose to a multi-decade high in September, disappointing both investors and policy makers. The CPI is one, but not the only metric for inflation. … Continue reading →

The Impact Rising Mortgage Rates Have on the MBS Market

Tuesday, October 11, 2022 With the Federal Reserve (Fed) aggressively raising short-term interest rates in an effort to arrest generationally high inflationary pressures, interest rates across the U.S. Treasury yield curve have move higher in concert. The move higher in … Continue reading →

Weekly Market Performance – Rough End To Positive Week

Index Performance View enlarged chart. U.S. and International Equities Markets Finish Higher Stocks finished higher as the S&P 500 Index ends its streak of five losing weeks in the past six. This week’s gains, Friday’s losses notwithstanding, can be credited … Continue reading →

Jobs Report Gives Hope to Soft Landing

Friday, October 7, 2022 Mixed Feelings Many analysts are likely having mixed feelings from reading the September jobs report. Yes, the persistent gain in jobs could keep alive the dream for a soft landing. But, the tighter labor conditions will … Continue reading →

Checking the Gauges on Potential Market Capitulation

Thursday, October 6, 2022 The S&P 500 hit a fresh year-to-date closing low of 3,584 on Friday September 30 before rallying almost 6% over the next 2 trading days, leading many investors to again wonder was that the bear market … Continue reading →

Midterm Year Seasonality Swings Favorable for Stocks

Wednesday, October 5, 2022 With so much focus on the equity bear market, inflation, interest rates, the Federal Reserve (Fed) and rising recession risks, it’s perhaps no surprise that the buildup to the U.S. midterm elections has taken more of … Continue reading →

Raising Our 10-Year Treasury Yield Year-end Forecast

Tuesday, October 4, 2022 The LPL Research Strategic and Tactical Asset Allocation Committee (STAAC) uses a number of quantitative models to help inform investment decisions. For interest rate forecasts specifically, we utilize a range of econometric models that take into … Continue reading →

Weekly Market Performance – Markets Selloff for Fifth Time Out of Six Weeks

Friday, September 30, 2022 Index Performance View enlarged chart. U.S. and International Equities Markets Finish Lower Markets worldwide were down sharply this week with the S&P 500 Index finishing lower by more than 1% for the fifth week in the … Continue reading →

Spending, Inflation Reports Send Mixed Signals

Friday, September 30, 2022 In a Word: “Disappointing” Revisions to July real spending and mixed signals about inflation make these latest economic reports disappointing. Real spending rose 0.1%, after falling -0.1% in July. Real spending was weak in August and … Continue reading →

How Markets Respond to Drawdowns

Friday, September 30, 2022 “Everything in boxing is backwards.” -Eddie Dupris, “Million Dollar Baby” When markets are down, the natural bias is to sell. But looking at history, the more the S&P 500 is down, the better it does in … Continue reading →

OPEC+ Looks To Defend Higher Oil Prices

Wednesday, September 28, 2022 Oil prices are rising today as hurricanes in North America introduce concerns over possible disruptions of supply, coupled with an easing of the U.S. dollar.  But despite this respite, unease among Organization of the Petroleum Exporting … Continue reading →

Weekly Market Performance – Markets Selloff For Fourth out of Five Straight Weeks

Friday, September 23, 2022 Index Performance View enlarged chart. U.S. and International Equities Markets Finish Lower Markets worldwide were down sharply this week with the S&P 500 Index finishing over 3% lower for the fourth week in the past five. … Continue reading →

Lunch Box Stagflation Isn’t Your 70s Style Slowdown

Friday, September 23, 2022 It’s hard not to call what we’re experiencing stagflation at this point, if there are any holdouts left. With growth flat for the first half of the year, growth expectations for the rest of the year … Continue reading →

Fed Gets Pessimistic, Yet Realistic

Thursday, September 22, 2022 A Bit More Pessimistic, A Lot More Realistic The Federal Open Market Committee (FOMC) increased the target rate by 75 basis points (bp) to a 3.25% upper bound and delivered a more pessimistic outlook in their … Continue reading →

High Yield Bond Performance After Recessions

Tuesday, September 20, 2022 Many market participants are expecting the U.S. economy to enter a recession within the next 12 months. A Bloomberg survey of various financial institutions indicates a 50% probability of recession over this period. The high yield … Continue reading →