LPL Research Market Signals Podcast

The 4th Quarter That Will Be

LPL Research

Third quarter delivered unexpected S&P 500 Index gains that historically have led to a strong fourth quarter. Factors that may weigh in include President Trump’s COVID-19 diagnosis, recent limited job growth, no new stimulus package, and a contentious election.

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Stocks ended their four-week losing streak, but then it was announced that the President of the United States contracted COVID-19, which added a whole new level of worry. This week in the LPL Market Signals podcast, we discuss the pandemic hitting the White House, the upcoming fourth quarter, and the disappointment in the jobs market.

COVID-19 strikes the White House

News that President Donald Trump and the first lady tested positive for COVID-19 rocked global markets on October 2. Fortunately, Trump appears to be on the mend and markets are bouncing. The bond market didn’t show much fear, a good sign for the economy. This is a fluid situation and one that could change at a moment’s notice, but so far, things appear to be under control.

Hello fourth quarter

Here comes the best quarter of the year. The usually weak third quarter didn’t play out this year, with the S&P 500 Index up 8.5%. This could bode well for the fourth quarter, as stocks have gained the past 11 times the S&P 500 was up more than 7.5% in the third quarter. But don’t forget—October historically has been the worst month of the year during an election year, so any weakness could be an opportunity.

Jobs disappoint

September nonfarm payrolls came in at 661,000, well below expectations. This continues a recent trend of disappointing employment data, while many large companies continue to lay off workers. Various parts of the economy are doing well, but by no means are things back to where we’d like them to be. One positive is that the odds of another stimulus bill being passed by Congress are higher now.

Chart - Big Q2 = Big Q3

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 Play, or Spotify.




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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