LPL Research Market Signals Podcast

More Stimulus, New Policies, and Stellar Earnings Season

LPL Research

Corporate earnings season is here, and this may be the last quarter of the “earnings recession.” What can investors and corporations expect under a new Democratic administration?

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Earnings season is here

Q4 earnings season kicked off last week with various large banks reporting. LPL Research strategists discuss potential winners and losers this earnings season—and the chances that this quarter may be the final quarter of negative earnings growth.

More talk about the Democratic blue wave

With the Democrats in charge of the White House and both chambers of Congress, investors have been asking what this Democratic “blue wave” could mean for the markets. The previous eight times a new Democratic president took office, the S&P 500 Index gained the following year six of eight times, with a very solid 11.9% average return. Additionally, with the Senate split 50/50 and the smallest seat majority in the US House for the Democrats since 1879, it’s most likely more extreme legislation could be tough to pass, which could help this equity rally.

What now?

One of the potential big winners of a blue wave is the financials sector. A blue wave likely means more stimulus and potentially higher rates and may be is a tailwind for financials. On the flip side, LPL Research downgraded its view on communication services. 

Chart - Earnings Recession Coming to an End

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.




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. 


For Public Use — Tracking #: 1-05099714 (01/22)