LPL Research Market Signals Podcast

Another Lehman Brothers Moment?

LPL Research

LPL Research discusses the ups and downs of Evergrande, yields, the prospect of tapering from the Federal Reserve Bank, and stocks and seasonality.

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A week ago, few had even heard of distressed Chinese property development giant Evergrande and now it’s the biggest headline for markets. LPL Research strategists Ryan Detrick and Jeff Buchbinder discuss if Evergrande will be another Lehman Brothers. Contagion such as that observed during the Global Financial Crisis 13 years ago is unlikely given the Chinese government’s interests and level of control, the quality of the company’s collateral, and the limited exposure to a possible default outside of China.

Ryan and Jeff also discuss this week’s Federal Reserve Bank (Fed) policy meeting. LPL Research does not expect any curve balls from the Fed but will be watching closely for clues as to the timing of interest rate hikes once bond purchases have been tapered.

LPL Research lowered its year-end forecast for the 10-year Treasury yield to 1.5-1.75% because of the economic soft patch related to the COVID-19 Delta variant and lower-than-anticipated interest rates overseas.

Finally, Ryan and Jeff point out that stocks have been due for a breather after more than doubling off the March 2020 lows, with Evergrande providing a convenient excuse. The timing should not be particularly surprising given this is a seasonally weak period of the year for stocks.

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 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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