Weekly Market Commentary
Weekly Market Commentary
Weekly Market Commentary
Get weekly stock market updates from top LPL Financial research strategists. Stay up-to-date on financial market trends and understand stock market predictions.
We understand that investing is both a financial and emotional effort, and it can be difficult to cut through all the clutter. LPL Research helps us keep a pulse on the global markets so that we can keep up with the rapid pace of change and make sure you feel informed and ready for what may lie ahead.
Will History Rhyme? A Fed Pause Has Been Good For Fixed Income
May 23rd, 2023 | LPL Research
If history at least rhymes during this cycle and we do see lower yields over the next year, intermediate core bonds could very well outperform cash and other shorter maturity fixed income strategies. Historically, core bonds, as proxied by the Bloomberg Aggregate Bond Index, have performed well during Fed rate hike pauses.
Earnings Update: Better Than Feared Undersells These Results
May 15th, 2023 | LPL Research
Solid earnings results compared with expectations have helped keep stocks afloat in recent weeks amid debt ceiling jitters, regional bank concerns, and louder calls for recession. But we’re still in an earnings lull and a weak seasonal period for stocks. While a Fed pause is likely to arrive in June, gains may depend on the continued resilience of the U.S. economy.
Sell in May
May 1st, 2023 | LPL Research
“Sell in May and go away” is the seasonal stock market pattern in which stocks generally produce the best returns from November through April and the worst returns from May through October. This pattern has been strong enough—and the adage popular enough—that it has probably been somewhat of a self-fulfilling prophecy over many years.
Draining the Lifeblood of the Economy
April 24th, 2023 | LPL Research
Small businesses are often considered the backbone of the economy because of the amount of economic activity generated by the sector, and it looks like a backache has emerged. Pay careful attention to surveys from the National Federation of Independent Businesses (NFIB) for leading insights in the direction of the U.S. economy.
A Closer Look at Commercial Real Estate
April 17th, 2023 | LPL Research
Credit and liquidity are the primary risks impacting the CRE market right now. While ownership of CRE debt is relatively diverse, banks hold 61% of all CRE mortgages, according to FactSet. Credit spreads within investment grade commercial mortgage-backed securities, which rise in conjunction with default risk, have roughly doubled over the last 12 months.
Earnings Review - Malaise Continues
April 10th, 2023 | LPL Research
Stocks may not get much support from earnings in the near term as the malaise continues. However, we do expect the market to benefit from the end of the Fed’s rate hiking campaign—likely in May. Higher interest rates may challenge stock valuations this year, but we still see potential for additional gains for stocks over the next nine months.
Who is Right, Federal Reserve or Financial Markets?
April 3rd, 2023 | LPL Research
Recession risk is still elevated, which explains why markets and the Fed are at odds about the future path of interest rates. Markets are probably right that the Fed will cut rates by the end of the year.
The 36-Hour SVB Collapse and Hierarchy of Blame
March 27th, 2023 | LPL Research
The rapid collapse of Silicon Valley Bank (SVB), followed by continued pressure on regional banks, along with headlines surrounding the struggle to shore up confidence in First Republic Bank (FRC), has the market on alert for other potentially vulnerable banks.
Wading Through Financial Stability Risks: An Action Plan
March 21st, 2023 | LPL Research
It’s easy to forget about long-term investment objectives when markets are fluctuating widely, but it is those moments when sticking to a well thought out plan is most critical. It’s also a reminder why a diversified asset allocation plan is important.
Latest Equity Asset Allocation Views
March 13th, 2023 | LPL Research
We’re in a very strong seasonal period for stocks, based on the four-year presidential cycle (year three has an average gain of 16.8%, higher 89% of the time since 1950). Fed pauses—likely coming fairly soon—have historically been followed by double-digit returns one year later, on average.
No Landing = No Sense
March 6th, 2023 | LPL Research
Economic activity does not stop like an airplane eventually does, but rather the economy will settle into a steady state where growth is consistent with factors such as population and productivity.
Debt Ceiling Primer
February 27th, 2023 | LPL Research
Since the government is running a fiscal deficit, and since Treasury cannot issue debt to cover that deficit, spending cuts would need to take place. The spending cuts, if prolonged, would likely push the U.S. economy into recession.
What's Changed and What It Could Mean
February 20th, 2023 | LPL Research
Last year, stocks and yields moved mostly in opposite directions. When inflation expectations and interest rates moved higher, stocks tended to sell off and vice versa. But we have seen this relationship change recently, as stocks and yields have risen together.
Trying to Stick the Landing
February 13th, 2023 | LPL Research
Low participation rates continue to weigh on the minds of economists and investors, but it’s important to remember that business formation stats are consistently growing above pre-pandemic levels
Brightening Outlook for International Equities
February 6th, 2023 | LPL Research
Investors got more excited about international investing late last year. Some of that was chasing better returns, as developed international equities solidly beat the U.S. over the last three months of 2022.
Will January's Market Hit the Trifecta?
January 30th, 2023 | LPL Research
The script has been flipped in 2023. Last year’s underperformers have turned into outperformers this year, driving the S&P 500 Index up over 5% this month. The pace and composition of the rally have left many investors skeptical over its sustainability, especially amid a lackluster earnings season thus far.
Q4 Earnings Preview: Pessimism May Be Overdone
January 18th, 2023 | LPL Research
The key question to answer this earnings season is whether the pessimism surrounding 2023 earnings has gone too far. LPL Research believes that it probably has.
2023 Market Outlook
January 3rd, 2023 | LPL Research
2022 was a dizzying year as markets and the global economy continued to find itself out of balance due to the still present aftereffects of the COVID-19 pandemic and the policy response to it.
Historic Year for Central Bank Activity
December 19th, 2022 | LPL Research
The Federal Reserve (Fed) wrapped up its last Federal Open Market Committee (FOMC) meeting of the year last week, where it hiked short-term interest rates for the seventh time in as many meetings, taking the fed funds rate to 4.5% (upper bound).
December Down, But Not Out
December 12th, 2022 | LPL Research
December is off to a rough start, and so far it’s not living up to its seasonal reputation of being one of the best months for equity market returns. Since 1950, the S&P 500 has historically produced average returns of just over 1.5% and has finished the month in positive territory 75% of the time.
Resilient Consumers Have Not Saved Retail Stocks
December 5th, 2022 | LPL Research
Elevated inflation this past year appeared to marginally impact the consumer but despite high prices, consumers were active on the Friday after Thanksgiving. Consumers were especially interested in heading to restaurants after Thanksgiving Day – spending at restaurants was over 20% above last Black Friday, partially driven by higher food prices but also supported by a resilient consumer.
Playbook for a Fed Pivot
November 21st, 2022 | LPL Research
In this week’s Weekly Market Commentary, we explore historical equity and fixed income market performance surrounding a Fed pivot, including the prospect for solid stock performance in the back half of 2023.
Inflation and Rising Rates Supports Value
November 14th, 2022 | LPL Research
The growth vs. value debate has been pretty one-sided in 2022, with value outperforming growth for a sustained period for the first time in almost 15 years...
How Midterm Elections May Move Markets
November 7th, 2022 | LPL Research
In this week’s Weekly Market Commentary, we look at why the stock market may respond favorably to the midterm election, whatever the outcome...
Federal Reserve Preview: TRICK or Treat?
October 31st, 2022 | LPL Research
With a series of important economic indicators suggesting the economy is declining and inflation is finally decelerating, albeit very slowly, markets are beginning to factor in that the Fed may soon transition to a less aggressive stance in early 2023.
Three Things to Know about Recessions
October 24th, 2022 | LPL Research
If the U.S. economy enters a recession, the causes and potential outcome will be hotly debated. At LPL Research, our starting point is always looking at history.
Low Bar for Earnings Season
October 17th, 2022 | LPL Research
Expectations are very low for this earnings season. The challenges are many, with intense cost pressures and slowing economic growth at the top of the list. The chorus of analysts and strategists calling for big cuts to estimates has gotten louder. Expect estimates to come down, but not collapse. Here we take a look at whether expectations are low enough as we preview third quarter earnings season.
How Much of a Problem is Concentrated Leadership for Stocks?
May 30th, 2023 | LPL Research
Mega-cap stocks, which have outlier market capitalizations and are often referred to as ‘the generals,’ have made an impressive comeback this year. Last year’s headwinds of higher rates underpinned by aggressive Federal Reserve (Fed) tightening have finally abated. Interest rate stabilization, signs of receding inflation, and a potential peak in the terminal rate by this summer have helped bring buyers back into the space.