Frothy Sentiment Rides Bullish Technicals
November 23, 2020 LPL Research
The reaction from stocks since the US election has been strong. The S&P 500 Index is up, and small caps have soared. Sentiment could be getting a little frothy as well, which may increase the odds of a pullback.
Q3 Results Brighten 2021 Picture
November 16, 2020 LPL Research
Corporate earnings results were surprisingly good in the third quarter, with 84% of companies beating earnings expectations. Stocks most likely are in a new bull market, potentially supported by a durable economic expansion.
Market-Friendly Election Outcome
November 09, 2020 LPL Research
Equity returns have been strongest under a split Congress, a likely scenario in 2021. Big tax increases are likely off the table, but passing another stimulus bill will probably be a priority for both parties.
Record GDP on the Eve of the Election
November 02, 2020 LPL Research
2020 has been a year of records, including the sharpest rebound in GDP since WWII. Plus, consumer spending rebounded mightily after the second quarter contraction. What does this signal for the election?
Are the Polls Wrong Again?
October 26, 2020 LPL Research
As the race for the White House enters the homestretch, some indicators suggest the election may be closer than polls are saying. GDP, stock performance, and the US dollar all have a history of picking the winner.
Three Reasons We Like Small Caps
October 19, 2020 LPL Research
Markets have come a long way since March lows, and we see further gains ahead for stocks. We think small cap stocks in particular may have attractive growth potential.
Earnings Growth is Approaching
October 12, 2020 LPL Research
Corporate America will get closer to the return of earnings growth this earnings season. Investors will need to watch for continued impact from COVID-19, policy changes based on the election outcome, and winners that keep winning.
Market Responses to Election Uncertainty
October 05, 2020 LPL Research
November presidential election results may be delayed or disputed, or both, and President Donald Trump’s COVID-19 diagnosis adds to the noise. How will the markets react to this election uncertainty?
What Technology’s Correction Means
September 28, 2020 LPL Research
Technology has mitigated downside during bouts of pandemic-inspired market volatility, while also posting considerable outperformance. In September, however, it has corrected more than 12% from its prior highs. What does this correction mean?
Central Bank Season
September 21, 2020 LPL Research
The Federal Reserve, European Central Bank, and Bank of Japan met in September to discuss the economy and monetary policy. Their policies remain focused on economic recovery, with an eye on COVID-19 developments.
The Bull Case for Stocks
September 14, 2020 LPL Research
Markets have been on a wild ride in September so far, with early strong days followed by one of the sharpest 10% corrections ever for the NASDAQ. Where will stocks go from here?
Top 10 Investor Questions
September 08, 2020 LPL Research
Why have stocks done so well in such a challenging economic environment and with COVID-19 still an ongoing threat? We answer that and other top questions from investors.
Election Preview Part II: A Trump Second Term—Upside and Risks
August 31, 2020 LPL Research
In Part II of our two-part election preview series, we look at the potential market impact if President Donald Trump is elected to a second term as president. We cover what we may expect in taxes, deregulation, jobs, trade, and initiatives.
Election Preview Part I:  A Biden Presidency—Upside and Risks
August 24, 2020 LPL Research
In Part 1 of a two-part election preview series, we look at the potential market impact if former Vice President Joe Biden is elected president, including what to expect in taxes, regulation, initiatives, and governance. Next week, we cover the same for President Donald Trump.
5 Earnings Season Takeaways
August 17, 2020 LPL Research
Corporate earnings blew away expectations this quarter, with an average upside surprise of 22%. There are a number of reasons estimates were off, and we have five key takeaways from this earnings season.
Dissecting the Disconnect
August 10, 2020 LPL Research
The US economy is struggling at the same time the stock market keeps churning higher. We highlight differences between the stock market and the economy to explain the disconnect between the S&P 500 and GDP.
Calendar Concerns and Gold Gains
August 03, 2020 LPL Research
August and September historically have been troublesome for stocks. Meanwhile, gold is breaking out to new all-time highs. Stocks may be ready for a break, but it’s still possible gold and stocks could trend higher together.
Stalling Economic Recovery May Slow Stock Market Rally
July 27, 2020 LPL Research
The stock market has shown some weakness recently, and timely data indicates the economic recovery may have stalled. Weekly jobless claims have increased, too. Investors are asking if the long-awaited market pullback is here.
An Earnings Season To Forget
July 20, 2020 LPL Research
COVID-19 lockdowns and widespread withdrawal of corporate guidance have set up an unpredictable earnings season. The magnitude of the decline we may see may make this an earnings season to forget. But it may not all be negative.
Election Preview
July 06, 2020 LPL Research
2020 is an election year, and history shows that the US economy has had major bearings on presidential election. How stocks and the economy are performing prior to the election may forecast the winner.
The Future of Fixed Income
June 29, 2020 LPL Research
The US economic recovery has picked up, and we expect Treasury yields to rise later in 2020, but structural pressure from the Fed, pandemic-driven demand, and inflation may limit the increase. Investors seeking income are in a tough spot.
5 Reasons We Favor US Stocks
June 22, 2020 LPL Research
Among developed markets, we maintain our preference for US equities over international. We also reiterate our positive emerging markets view. Recent weakness in the US dollar is noteworthy as well.
Potential Paths for Stocks in the Second Half
June 15, 2020 LPL Research
Stocks staged perhaps the strongest rally in history—a more than 44% gain for the S&P 500 Index from March 23 through June 8—before pulling back about 3% late last week. With so much economic healing ahead of us and a still-uncertain path for COVID-19, the key question for investors is whether stocks are pricing in an overly optimistic scenario for the recovery in economic activity and corporate profits.
Prospects for a Swoosh-Shaped Recovery
June 08, 2020 LPL Research
The strongest 50-day rally in the S&P 500 in over 70 years has sent a signal that the economic recovery is gaining steam and may look more like a “V” than a “U,” a square root, checkmark, or swoosh. We assess the probabilities of these various scenarios for recovery and reiterate our 2020 economic growth forecasts.
Stocks Rally and Roll
June 01, 2020 LPL Research
Stocks rallied to close May on the positive side. There’s still a disconnect between the market and the economy, while reopening optimism and massive stimulus compete with COVID-19 concerns and US-China tensions.
Earnings Season's Mixed Results
May 26, 2020 LPL Research
First quarter earnings season offered a mixed bag. Corporate America produced solid results outside of the COVID-19 pandemic trouble spots, while 2020 earnings estimates have plunged. A return to “normal” earnings could be two years or more away.
Downside Risk Remains
May 18, 2020 LPL Research
Stocks fell last week, and we think more near-term downside may be possible. We take a look at likely catalysts, including high stock valuations, Fed Chair Powell’s gloomy outlook, and rising US-China tensions.
Time For A Pause?
May 11, 2020 LPL Research
Stocks tend to lead the economy, and they’ve had a historic run recently. Both a rebound and some equity weakness may be likely. Stocks may also take a break as we enter the historically worst six months of the year.
Big News And New Forecasts
May 04, 2020 LPL Research
Financial news provided the highlights in a week with the S&P 500 Index ending about flat. Headlines featured estimates of Q1 2020 GDP, a top-tier economic report, major central bank meetings, and the busiest week of earnings season.
What Happened to Oil
April 27, 2020 LPL Research
Negative oil prices have dominated headlines recently. While few of us speculate on commodity futures, the price of oil is an important variable. We explain what happened and where oil prices could be headed ultimately.
Is the Earnings Bar Low Enough?
April 20, 2020 LPL Research
COVID-19 travel restrictions and lockdowns have impacted corporate earnings results dramatically. As earnings season begins, we believe there will be winners and some challenges, the bar may be set too low, and forecasting has included some guesswork.
A Recession Is Here
April 13, 2020 LPL Research
We are now in recession, but it’s a very unique recession. It may be one of the shortest, and we may see an economic bounce back later this year. Stocks may enjoy better times ahead.
Market Bottoming Process Continues
April 06, 2020 LPL Research
Stock market volatility remains high as investors closely track COVID-19. We’re watching for signs that investors can start thinking about a resumption of economic activity and an economic rebound. In the meantime, stocks may revisit the March lows.
Road to Recovery Playbook Update
March 30, 2020 LPL Research
The COVID-19 impact to our economy and workers has been devastating, but we’ve seen some positive developments from monetary and fiscal stimulus. We update our Road to Recovery Playbook on signs of a major low in equities.
Key Week for the Bottoming Process
March 23, 2020 LPL Research
The US economy has been impacted in a number of ways, and we are likely in recession now. What began as a crisis of confidence has transitioned to a business crisis, but positive steps are being taken.
Road to Recovery Playbook
March 17, 2020 LPL Research
COVID-19 has sent equity markets into bear market territory. But once the market finds its bottom, it may provide attractive buying opportunities. To guide long-term investors, LPL Research has compiled a Road to Recovery Playbook.