If you look at market sentiment, it’s come off of the lows, but we’re not seeing extreme bullishness.- Ryan Detrick – LPL Senior Market Strategist
In this week’s Market Signals podcast, the LPL Research strategists discuss the continuing market rally, LPL Research’s Gross Domestic Product (GDP) forecast, and the effects of the headlines out of Washington.
The market rally continues, with the Dow, Russell 2000, and Nasdaq all up for the eighth consecutive week. Although markets are extended near-term, our LPL strategists do see signs pointing to potentially continued equity strength.
With the S&P 500 up approximately 17% from the December lows, the strategists do note their surprise that investor sentiment is still contained. It’s worth noting that once investors are over-the-top bullish, major peaks can form. In a recent survey of global fund managers, fund managers report they have the largest allocation to cash they’ve had since January 2009. This is cash on the sidelines and could help continue to push stocks higher.
LPL Research has slightly lowered its US Gross Domestic Product (GDP) forecast for 2019 to 2.50% from a range of 2.50-2.75%. That small decrease can be attributed to concerns over business investment and China trade issues.
The S&P 500 broke above its 200-day moving average last week, now the question is, “Can it hold?” The previous three times it was above this trend line, it sold off.
Tune in this week to get more in-depth insights into current market conditions and drivers. To make sure you don’t miss an episode, subscribe to the Market Signals podcast series on iTunes, Google Play, Spotify, or wherever you get your podcasts.
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