LPL Research Market Signals Podcast

The Krispy Kreme Indicator

LPL Research

Stocks are choppy in typical year two fashion. Yet, many worries are creeping in, with the upcoming Krispy Kreme IPO near the top of the list.

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Year Two Mess

Year two of bull markets is usually strong, but it can also be quite messy. Ryan noted that this bull market won’t be much different than the others and a choppy mess the next few months could be perfectly normal. Scott discussed how market breadth has been weak, even with stocks making new highs. In other words, he has some yellow lights flashing.

The Krispy Kreme Indicator

Ryan noted that although he is a fan of Krispy Kreme doughnuts, it is quite interesting to see they are set to have their IPO this week. This matters, as Krispy Kreme had their first IPO back in April 2000, right as the stock market peaked before a three-year bear market. Could it happen again? Scott noted that we are still very early in this new cycle of growth and the Fed is quite accommodative, both major differences. However, Ryan did point out that stocks are as expensive as they’ve been since the late 1990s, so that is another worry. Overall, the strategists don’t think there is any major worry of impending doom due to this IPO.

The Latest from the Fed

The Fed was in damage control last week, after the latest meeting was viewed as being a tad hawkish. Various members came out and did all they could be to calm the fears that the Fed was going to be hiking rates sooner than later. Although this makes sense to us, Ryan did note that historically stocks do just fine after the first rate hike. His rationale is the economy is likely young and still expanding early in rate hike cycles, so maybe everyone should just calm down!

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.

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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.

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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For Public Use — Tracking # 1-05160314 (06/22)