Five Ways to Poke The Bear

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Jackson Hole Review

At the Annual Jackson Hole Economic Symposium, Federal Reserve (Fed) Chair Jerome Powell calmed any fears over higher rates anytime soon. As Lawrence notes, Powell made it clear that tapering could be coming, but that doesn’t mean higher rates are also coming. It was widely expected that a year after tapering started we’d see the first rate hike—but Powell put cold water all over that—and it could be much longer. As a result, stocks soared. Ryan explains how the punch bowl isn’t leaving yet.

Poking Some Bear Arguments

Ryan begins by pointing out that when stocks are up a lot (more than 15% for the year) at the end of August, the final four months actually do better than average. Lawrence adds that earnings have been extremely strong, and it isn’t just because of easy year-over-year comps. We’re not seeing a taper tantrum like 2013, as the Federal Reserve Bank has telegraphed things much better this time around. Ryan chimes in that many think cyclicals are dead, but we disagree and expect this group to begin taking the baton back. It might have started already after a huge move from small caps last week. Ryan and Lawrence wrap up the conversation with some Washington talk and why policy won’t derail things.

Tune in now

Listen to the entire podcast to get the LPL strategists’ views and insights on current market trends in the US and global economies. To listen to previous podcasts go to Market Signals podcast. You can subscribe to Market Signals on iTunes, Google Podcasts, or Spotify and find us on the LPL Research YouTube channel.

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data is from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC. 

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