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Market Commentary

Market News & Insights

Keep yourself informed and prepared with our weekly stock market updates provided by leading research strategists from LPL Financial. Gain valuable insights into the latest trends in the financial market and remain ahead of developments in the stock market.

Keep Calm and Clip Bond Coupons

June 17, 2024 | LPL Research

With a Federal Reserve (Fed) meeting, a Bank of Japan (BOJ) meeting, two very important inflation reports, and nearly $120 billion of new Treasury securities auctioned — last week was quite the week for markets. And while the Fed meeting was supposed to get top billing, it turned out the inflation data stole the show. In fact, at least for the Treasury market, it’s been the economic data that has had the largest impact on changing bond prices/yields. But with economic data released daily, that has meant the volatility in the Treasury market has been dizzying lately. So, what should bond investors do during this period of heightened volatility? Keep calm and clip bond coupons.

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India at the Crossroads

June 10, 2024 | LPL Research

Indian Prime Minister Narendra Modi’s recent victory in the national elections was muted at best. While he secured a rare third term in the nation’s highest office, his decisive legislative supermajority failed to materialize. Modi has made revitalizing the Indian economy and increasing foreign direct investment (FDI) a cornerstone of his pro-business platform. With markets adjusting to the unexpected outcome and new legislative circumstances, he and his party now pursue cementing the economic gains generated in his earlier terms, to ensure India continues making strides towards a modern capitalist economy that includes the wider populations and supports all Indians. Global markets will be monitoring the composition of the new cabinet and the introduction of the budget in July to ascertain that the Modi doctrine remains relevant, pro-business, and above all else, pro-India.

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Adjusting the Sector Sails

June 3, 2024 | LPL Research

To say May was an eventful month for the market is an understatement. Investors navigated around the latter half of first-quarter earnings, a breakout to record highs for the broader market, elevated volatility across fixed income and currency markets, and a mixed bag of economic data — not to mention elevated political uncertainty stemming from the conviction of former President Donald Trump. Overall, markets shrugged off political uncertainty, bad economic data was mostly taken as good news for stocks by reviving hope for interest rate cuts, while good news helped write the goldilocks narrative of economic conditions being just right.

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Earnings Are Doing Their Part: Exploring Q1 Earnings

May 28, 2024 | LPL Research

The first quarter earnings season is largely in the books, and it was excellent. In fact, S&P 500 earnings per share (EPS) would have been up double digits in the quarter if not for a big loss Bristol Myers Squibb (BMY) absorbed in an acquisition. Even with that nearly three-point drag from the drugmaker, a nearly 7% increase in earnings — the biggest since the first quarter of 2022 — is impressive. Big tech strength was again the primary driver, and estimates impressively rose.

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How's It Going? Depends on Who You Ask in a Post-Pandemic Economy

May 20, 2024 | LPL Research

The economic recovery isn't even for everyone. Homeowners who refinanced during the pandemic are enjoying low interest rates and feeling less impacted by inflation. However, this creates a challenge for policymakers - how to raise rates to control inflation without hurting renters who are already struggling. This issue will likely be a major topic at an upcoming economic conference, with potentially significant investment implications.

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Preferred Securities: Still Our Preferred Non-Core Bond Sector

May 13, 2024 | LPL Research

Fixed income markets, particularly high-grade bonds, face headwinds. The Federal Reserve's wait-and-see approach on interest rates means prices are likely to stay flat, limiting potential gains for investors. For income-focused investors, preferred securities offer a compelling alternative. Their yields remain elevated compared to historical norms, making them an attractive option to generate income in this environment.

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Sell in May? Maybe Not. Is It More Rhyme Than Reason?

May 6, 2024 | LPL Research

“Sell in May and Go Away” is one of the most widely used maxims on Wall Street. There is no shortage of financial media coverage on this topic as the calendar turns to May. However, this phrase may be more rhyme than reason, as stocks tend to trade higher during this period (especially more recently), subject to potentially elevated volatility. 

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That Was Quite a Week: A Pivotal One for the Markets

April 29, 2024 | LPL Research

Stocks passed the test, with the S&P 500 up 2.7% for the week, recapturing most of the prior week’s losses despite a mixed GDP report and a double-digit decline in shares of social media giant Meta (META) on April 25, after its results. Here we recap the week’s events and check in on sentiment.

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Volatility Is Back: Understanding Ever-Changing Market Narrative

April 23, 2024 | LPL Research

Volatility has come back into the market as the narrative shifted toward a higher-for-longer monetary policy backdrop. Signs of sticky inflation and a resilient economy, including a strong labor market, have underpinned the change in expectations. Yields have reacted by rerating significantly higher this month, while stocks have pulled back from overbought conditions.

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Revisiting Energy: How Rate Cuts Could Benefit the Space

April 15, 2024 | LPL Research

As the first quarter earnings season kicked off on April 12, expectations for the energy sector were
decidedly negative. That low bar has tempted analysts to forecast a series of positive surprises as recent
data releases for both the U.S. and China suggest a stronger economic underpinning, and the
manufacturing sector appears to have bottomed in both countries.

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What to Watch This Earnings Season

April 8, 2024 | LPL Research

First quarter earnings season kicks off this week with several big banks reporting this Friday, including sector bellwether JPMorgan Chase (JPM). This quarter will seem quite similar to the fourth in terms of growth and drivers, with mega cap technology leading the way. 

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IPOs as a Market Tell: What a Recent Uptick Could Mean

April 1, 2024 | LPL Research

The 2023 IPO market was slow to suggest improvement over the relatively dormant stream of deals in 2022. There were 171 companies that went public compared with 218 in 2022; however, in terms of capital that was raised, 2023 was slightly more successful — reaching $26.2 billion versus $24.2 billion in 2022.

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Navigating the Strategic Investing Landscape: The Differences

March 25, 2024 | LPL Research

The difference between strategic and tactical investment time horizons can be likened to the ebb and flow of tidal patterns in oceans. Strategic investing mirrors the steady rise and fall of the tides, focusing on long-term goals and expectations more stable akin to the predictable rhythm of oceans. 

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Gold Shines Brighter Than Ever, Rallying to Record High

March 11, 2024 | LPL Research

Gold is widely considered as a store of value that can help hedge inflation risk and diversify a portfolio. During periods of elevated market volatility and heightened geopolitical risk, gold also serves as a safe haven asset. These characteristics helped shape the Wall Street adage of “hold gold and hope it doesn’t go up.”

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Outlook for U.S. Economy Continues to Brighten

February 12, 2024 | LPL Research

The stronger employment figures tell us that businesses and households have stronger momentum going into 2024, and therefore, we believe it is prudent to increase our forecasts for economic growth. Headwinds remain but on an annual basis, we believe the U.S. and global economy is poised for a bit stronger growth this year than originally forecasted last year. 

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Will the January Barometer Come Through?

February 5, 2024 | LPL Research

A positive January has historically been a bullish sign for stocks. Yale Hirsch, creator of the “Stock Trader’s Almanac”, first discovered this seasonal pattern back in 1972, which he called the January Barometer and coined its popular tagline of ‘As goes January, so goes this year.’ Here, we assess the likelihood that this popular stock market adage delivers more gains for investors this year. The weight of the evidence leans toward yes, as we explain.

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Is Too Much Optimism Priced In?

January 29, 2024 | LPL Research

With the S&P 500 having recently ascended to a fresh record high after such a strong 2023, it’s natural for investors to worry that valuations have become over-extended. On traditional valuation measures, valuations do appear high and it does seem reasonable to expect more moderate stock market returns going forward. Here we walk through several different stock valuation approaches to get a more complete picture and even make the case that they aren’t as pricey as they look.

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