LPL Financial Market Signals Podcast

Coronavirus Fears and Plunging Oil Prices l LPL Market Signals Podcast

March 09, 2020

LPL Research

This week, LPL’s Chief Investment Officer Burt White joins LPL strategists to discuss coronavirus fears, plunging oil prices, the bull market birthday, and some positive news for the stock market.

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Oil plunges on demand

Infighting at OPEC last week sparked Saudi Arabia to launch an all-out price war, pummeling crude oil prices on Monday. Global demand is a major concern, and now with potentially too much supply, the price is collapsing. As the LPL strategists discuss, this is a potential first domino to fall, as energy is a large part of the high-yield bond market. The credit markets have historically been a good signal of potential economic stress, suggesting that lower energy prices could significantly impact high-yield, which could lead to more economic disruption.

Bull market birthday

March 9, 2020 marks the 11-year anniversary of the beginning of the current bull market.  Will it make it to 12 years? As the LPL strategists discuss, a strong US consumer and cheaper valuations are two reasons to think it will. The major negatives are the coronavirus impact on the global economy, along with the fact that bull markets can’t continue forever. Could this one simply tire out?

Some good news

Although the near-term global economic outlook has worsened, it is worth noting that copper has held up quite well recently. This industrial metal is quite economically sensitive and could be a potential positive sign. Also, China’s stock market has quietly started to outperform globally. As the LPL strategists note, we are seeing a historic washout of stocks here, so.any good news could spark a big rally.

Chart - Longest Bull Market Since WWII

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 iTunesGoogle Play, or Spotify.

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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.

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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