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Where things stand now
LPL Research continues to follow developments of our five signals that we believe, collectively, could signal an appropriate time to get more positive on equities as the market’s bottoming process continues.
- LPL Research has upgraded Signal #1 to “Already there” based on the stabilization of new COVID-19 cases in recent weeks, even as testing ramped up. Though another wave of new cases is possible as states reopen, LPL Research believes the peak in daily new cases in the United States established during the second week of April around 34,000 is very likely to hold up.
- Signal #2 and Signal #5 are “Already there.” Job losses have given investors visibility into the severity of a US recession, while massive policy responses from Washington, DC, and the Federal Reserve have helped shore up investor confidence and cushioned the economic blow.
- Two signals are “Almost there.” With the S&P 500 Index more than 25% off its March 23 low, stocks are no longer pricing in a recession (Signal #3) and are no longer oversold from a technical analysis perspective (Signal #4).