LPL Research Market Signals Podcast

Central Bank Frenzy

LPL Research

LPL Research strategists discuss the jobs report, global monetary policy, and where they see rates through the rest of the year.

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LPL Research strategists Ryan Detrick and Lawrence Gallium analyze the recent weakening economic data and what it means for Federal Reserve Bank (Fed) policy, while also looking at global central bank policy. They also consider what could be in store for stocks and bonds the rest of 2021.

Weak Jobs Report and Economic Data

Ryan noted the August nonfarm payrolls missed estimates by nearly 500k, while other recent economic data has been weak as well. Specifically, he noted a historic drop in Consumer Confidence. But what does it mean though? Clearly, the Delta variant is impacting things, but Ryan’s view is that any slowdown in Q3 will be made up in Q4. Given stocks were flat on the day suggests markets weren’t worried. Lawrence points out that this does little to change or alter Fed policy, and in fact, it could push back tapering—which could mean we are back to a “bad news is good news” world.

Central Bank Roundup

Lawrence points out that Central Bank balance sheets have increased by $10 trillion since the pandemic started. Although he sees the pace of balance sheet expansion slowing, it is clear that accommodative central banks are here to stay for the meantime. September is also a huge month, with a Fed meeting, along with Bank of Japan and European Central Bank (ECB) meetings. With the Delta variant concerns, we would continue to expect dovish central banks and more accommodative policies.

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 iTunes, Google Podcasts, or Spotify and find us on the LPL Research YouTube channel.

 

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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