As stocks rallied 30% off the March 23 lows and earnings expectations were cut dramatically, valuations have become increasingly concerning for many investors (including some high-profile hedge fund managers being quoted in the financial press). As shown in the LPL Chart of the Day, the forward (next 12 months) price-to-earnings (PE) multiple for the S&P … Read more
Recent economic data confirms that the US economy has entered a recession, led by the consumer, which accounts for more than two-thirds of the economy based on gross domestic product (GDP). The consumer spending collapse was evident from March’s personal consumption expenditures data released last Wednesday, which showed a record 7.5% month-over-month drop in consumer … Read more
The Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of Japan (BOJ) all met in the last week and while the show of power was minimal compared to recent weeks, they collectively reasserted their resolve to do whatever is necessary to support the global economy through the COVID-19 economic crisis. Rates are … Read more
With 20% of S&P 500 Index companies having reported first quarter results so far, earnings season has been a mixed bag. In our April 13 earnings preview, we noted that S&P 500 Index earnings for the quarter were expected to decline 10% year over year, based on FactSet’s consensus estimates from analysts. That number is minus 15% … Read more
The economic data keeps getting worse, yet stocks have been in the midst of one of the greatest multi-week rallies ever. As the LPL Chart of the Day shows, the S&P 500 Index gained 27.2% in the 15 days after the March 23 lows, the greatest three-week rally since 1933. Take note, this rally took place … Read more
The economic damage inflicted by the current COVID-19 pandemic has been unprecedented, with thousands of businesses temporarily shuttered and millions of workers out of work. While the historic drop in economic activity is real and will be reflected in the second quarter gross domestic product (GDP) numbers, some nuances in the way GDP is reported … Read more
Weekly new jobless claims were reported this morning, and to no one’s surprise they rose to levels thought unimaginable just a few weeks ago. As shown in the LPL Chart of the Day, 3.3 million people filed new claims for unemployment benefits in the week ending March 21, almost 5 times the previous high of … Read more
With US equities firmly in a bear market, even the most long-term investors are now looking ahead to when the selling may stop and where the S&P 500 Index might ultimately bottom. “Nobody knows exactly how this market bottom will play out,” said LPL Financial Senior Market Strategist Ryan Detrick. “However, using history as guide, … Read more
The Federal Reserve (Fed) surprised markets over the weekend by holding its March 17-scheduled meeting a few days early and introducing a wide range of provisions. Those provisions are intended to add liquidity, increase credit availability, lower the cost of borrowing, and eventually support the economy’s recovery from the impact of COVID-19. Usually, Fed actions … Read more
The S&P 500 Index’s historic slide continued yesterday, culminating in nearly a 10% loss for the day, and leaving the benchmark index officially in bear market territory, just 16 trading days after setting a record high on February 19. In addition, the S&P 500 has now moved more than 4% each day this week, leaving … Read more
Markets remain volatile on coronavirus uncertainty. Despite a strong day for the S&P 500 Index yesterday on stimulus prospects and greater election clarity, we expect market volatility to continue. The overnight news cycle pulled S&P 500 futures meaningfully lower as containment efforts intensified. Until we have a clearer picture of the course of the virus, market volatility will likely persist and … Read more
Keeping your cool can be hard to do when the market goes on one of its periodic roller-coaster rides. It’s useful to have strategies in place that prepare you both financially and psychologically to handle market volatility. Here are 11 ways to help keep yourself from making hasty decisions that could have a long-term impact … Read more
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