Market Commentary

LPL ResearchWeekly 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.

Keep Calm and Clip Bound 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.

Learn more

India at the Crossroads: Election Impact on India’s Economy

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.

Learn more

Adjusting the Sector Sails

June 03, 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.

Learn more

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.

Learn more

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

May 20, 2024 | LPL Research

It continues to be a challenging environment for a lot of fixed income markets, especially higher quality markets. With the Federal Reserve (Fed) seemingly unlikely to lower interest rates until after the summer months (at the earliest), the “higher for longer” narrative has kept a lid on any sort of bond market rally. And while falling interest rates help provide price appreciation in this higher-for-longer environment, fixed income investors are likely better served by focusing on income opportunities. That’s where preferreds come in. With yields still elevated relative to history, we think preferred securities are an attractive option for income-oriented investors. 

Learn more

Preferred Securities: Still Our Preferred Non-Core Bond Sector

May 13, 2024 | LPL Research

It continues to be a challenging environment for a lot of fixed income markets, especially higher quality markets. With the Federal Reserve (Fed) seemingly unlikely to lower interest rates until after the summer months (at the earliest), the “higher for longer” narrative has kept a lid on any sort of bond market rally. And while falling interest rates help provide price appreciation in this higher-for-longer environment, fixed income investors are likely better served by focusing on income opportunities. That’s where preferreds come in. With yields still elevated relative to history, we think preferred securities are an attractive option for income-oriented investors. 

Learn more

Sell in May? Maybe Not. More Rhyme Than Reason

May 06, 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. Of course, seasonality is one factor that could influence markets, but the economy and monetary policy are much bigger factors. With the Federal Reserve (Fed) pointing to higher-for-longer monetary policy last week (before Friday’s softer jobs report), we also explore how stocks perform during prolonged Fed pause periods.

Learn more

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

April 29, 2024 | LPL Research

Last week was a pivotal one for markets, with the S&P 500 coming off a 3% weekly decline the week before. In terms of economic data, we got our first look at first quarter gross domestic product (GDP) as well as the March reading of the Federal Reserve’s (Fed) favorite inflation measure — the core PCE deflator. If that wasn’t enough to digest, over 150 S&P 500 companies reported quarterly earnings last week, including the first batch of big tech names. 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.

Learn more

The Ever-Changing Market Narrative

April 22, 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. Technical damage is beginning to mount on the S&P 500, but its longer-term uptrend remains intact. The U.S. dollar has followed yields higher, creating headwinds for U.S. multinationals and currency stability headaches for other central banks.

Learn more

Revisiting Energy

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. Oil demand — and prices — typically follow rising manufacturing and factory output, while rising consumer sentiment normally portends an increase in air travel, which also requires higher oil allocations.

Learn more

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. But importantly, the point when the “493” will start contributing to overall profits is drawing closer (the 493 refers to the S&P 500 minus the seven mega cap technology stocks). Here we preview first quarter earnings season, which will benefit from an improving economic environment and continued strength in technology.

Learn more

IPOs as a Market Tell

April 1, 2024 | LPL Research

The initial public offering (IPO) market allows institutional investors to incorporate the macroeconomic landscape with individual corporate earnings data — and future earnings forecasts — to ascertain a share price that will hold up to analyst and media scrutiny coupled with overall market dynamics. However, the IPO market has increasingly included allocations for a retail tranche designed to include clients of brokerage firms that receive shares during the issuance stage of the IPO process. So-called “friends” of the company going public also receive shares via Directed Share Programs (DSPs), but this typically lowers the amount of shares that are available to retail clients. For retail clients, the IPO market is far from a level playing field. The IPO process awards the largest portion of new shares to the institutional market by a wide margin. Here we provide an update on recent IPO activity, performance, and discuss why IPO activity matters for markets.

Learn more

Navigating the Strategic Investing Landscape

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. On the other hand, investing in tactical time horizons resembles the dynamic nature of changing tides, responding to short-term market conditions like unpredictable surges and waves in the sea. Here we compare and contrast these two distinct processes and recap our recent strategic asset allocation change.

Learn more

A Busy (And Perhaps Historic) Week for Central Banks

March 18, 2024 | LPL Research

It seems like we just can’t stop talking about central banks. And this week will be no different, with at least 15 central bank meetings planned, some more important than others, of course. While the Federal Reserve (Fed) meeting will likely take top billing in the financial media, it’s the Bank of Japan (BOJ) meeting on Tuesday that could be the real game changer. With inflationary pressures still above target in Japan, the BOJ may finally be ready to take interest rates out of negative territory for the first time since 2016. If true, the era of free money will finally be over, which could have an impact on U.S. markets.

Learn more

Gold Shines Brighter Than Ever

March 11, 2024 | LPL Research

Bullion broke new ground last week after rallying to a record high. Growing investor confidence for a Federal Reserve (Fed) rate cut by this summer dragged down yields and the dollar, creating a tailwind for gold. The breakout above key resistance at $2,075 was also a major technical development, confirmed by bullish momentum that suggests the rally could continue. Global central bank demand has been another key catalyst and has shown no sign of slowing down, while a rebound in demand from gold-related exchange-traded funds (ETFs) could provide additional support for the yellow metal.

Learn more

Super Six Drives Solid Earnings Season

March 04, 2024 | LPL Research

Fourth quarter earnings season is winding down with only about a dozen companies in the S&P 500 left to report. After a slow start mired by messy bank results early on, corporate America picked up the pace and ended up delivering results well ahead of expectations. The “Super Six” was part of the story — the Magnificent Seven minus Tesla (TSLA) — but resilient profit margins are also noteworthy. Here we review fourth quarter earnings season and share some thoughts on the earnings outlook for 2024.

Learn more

Buybacks Are Back

February 26, 2024 | LPL Research

After a brief lull in 2023, buyback activity appears to be back this year. A resilient U.S. economy, easing inflation pressures, and expectations for an eventual shift to interest rate cuts have given corporate America confidence to boost authorized share repurchases. These companies have a history of outperforming the broader market and tend to have more exposure to momentum, value, and growth factors. While buybacks also reduce share count and help support earnings growth and valuations, they can also help limit downside volatility during periods of selling pressure.

Learn more

Treasuries: Who’s Buying and Why It Matters

February 20, 2024 | LPL Research

As the Federal Reserve (Fed) continues with its Quantitative Tightening (QT) program, questions abound regarding the Treasury Department’s expanding funding needs. The QT program is designed to reduce the Fed’s balance sheet — now $7.7 trillion down from $9 trillion — after Treasury notes (mostly) were bought after economic concerns intensified during the COVID-19-related pandemic. Households and, perhaps surprisingly, foreign investors have been buyers recently, and with the amount of Treasury supply coming to market, both will need to keep buying.

Learn more

Outlook for U.S. Economy Continues To Brighten

February 12, 2024 | LPL Research

When we wrote the annual outlook last November, the data was mixed. Some metrics hinted at emerging cracks in the economy while others suggested the growth trajectory in capital markets and the economy had legs. So, the variety of the data produced the narrative that business activity in the New Year would grow on an annual basis but experience some bumps in the first half of the year. Now, enter the revisions.

Learn more

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.

Learn more

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.

Learn more

Will Shipping Disruptions Alter Fed Plans?

January 22, 2024 | LPL Research

Shipping disruptions in the Red Sea could temporarily impact goods prices but not at the same magnitude as during the pandemic. Tight financial conditions, slowing economic growth, and a disinflationary trend all support the Federal Reserve’s (Fed) pivot away from tightening monetary policy to easing in the new year. Despite these longer term trends, rates possibly got ahead of themselves in recent weeks, exhibiting higher volatility.

Learn more

Magnificent Seven and Margins Are Keys to Q4 Earnings Season

January 16, 2024 | LPL Research

Fourth quarter earnings season kicked off last week, and markets were generally left wanting more. That doesn’t necessarily mean this earnings season will be disappointing, especially considering the bar has been lowered so much. Plus, some of the disappointment was around special bank charges and November-quarter-end companies’ results were solid. This reporting period may lack the splashy “earnings recession over” headlines we got last quarter, but it takes on added importance because it sets the tone for 2024. After 2023 was a year in which improving valuations delivered strong gains, this year, earnings will likely have to do the heavy lifting.

Learn more

China 2024 Faces Demanding Challenges

January 08, 2024 | LPL Research

As China emerged a year ago from the shadow of the stringent zero COVID-19-related measures that all but shut down its economy for over two years, much was expected in terms of its economic growth prospects. There were numerous reports suggesting the world’s second largest economy would ignite a bout of inflation as its industrial base would require vast quantities of commodities to power a newly energized China. Clearly that didn’t happen. Here we explore why and provide our updated thoughts on investing in China and emerging markets.

Learn more

Lessons Learned in 2023: "This Time Is Different" In Post-Pandemic Economy

January 02, 2024 | LPL Research

To say 2023 was challenging may be an understatement. While stocks had a surprisingly impressive year, there was no shortage of obstacles for investors to overcome, including historic interest rate volatility, recession risk, banking sector turmoil, and a game of monetary policy chicken played between the markets and the Federal Reserve (Fed). LPL Research had some wins and some losses as the market delivered its usual dose of humility to us and many market participants. In an effort to maintain accountability and learn from our mistakes (and hopefully not repeat them), we are starting the new year with our traditional lessons learned commentary.

Learn more

Key Equity Themes for 2024

December 18, 2023 | LPL Research

Following the Federal Reserve’s (Fed) aggressive rate-hiking campaign in 2022 and 2023, stocks are entering a phase in which the market narrative is focused on interest-rate stability — as inflation, we believe, comes down further. Low and stable interest rates should help support stock valuations, while corporate profits are moving into a sweet spot. So even though stocks look fully valued, if rates ease as we expect, we could see upside to our year-end 2024 fair-value target range of 4,850 to 4,950. We highlight some key themes for stocks next year.

Learn more

Discord in the OPEC+ Oil Patch

December 11, 2023 | LPL Research

Despite a heavy lobbying effort to cajole OPEC+ members to agree to a unified cut in oil production, Saudi Arabia, the de facto leader of the energy cartel, was unable to orchestrate anything more than pledges on a “voluntary” basis. Accordingly, benchmark oil prices continued to slide lower following the announcement, and without a catalyst to propel prices higher, oversupply in the market coupled with concerns over the global economic landscape, have steadfastly kept prices lower.

Learn more

Market Opportunities Amid An Economic Rotation

December 04, 2023 | LPL Research

Opportunities abound in the markets, even during periods when the economy appears ripe for a regime shift. Recent growth metrics surprised to the upside, but leading indicators point toward some downside risk. In this edition of the Weekly Market Commentary, we examine potential opportunities amid a rotation in housing, buying patterns, and inflation.

Learn more


MEET OUR TEAM

We guide you and your family through every step of your financial planning journey, breaking down the complexities into clear and understandable terms.

Hugh Lau, CIMA®

Hugh Lau, CIMA®

Managing Director

Learn more
Jo Kreitman

Jo Kreitman

Branch Operations Manager

Learn more
Shannon Lau

Shannon Lau

Marketing Director

Learn more

Value and respect you and your family deserve

We want to put our experience and philosophy of optimism and dedication to work for you, helping you invest your box of lemons into a lasting legacy.

CONTACT US TODAY