Financial Insights

Myth Busting: LPL Research Takes On 4 Market Myths

There are several market myths related to certain market indicators which have the tendency to distract investors from what really matters in assessing market opportunities.
LPL believes the overall fundamental backdrop is currently quite positive thanks to solid economic growth and strong corporate earnings trends, while market sentiment and technicals continue to suggest future equity strength. This week they will bust some common market myths.   Read More  »

Has the Stock Market Bottomed Out?

The February 2018 market correction caught many investors off guard, but the longer-term trend remains higher.
So says LPL Research.  “This year has provided more volatility than we’ve seen in recent years, with many wondering if the movement is a sign that the bull market is ending. Remember that when the market is finding its lowest point (the bottom), the process to get there can be quite frustrating and even confusing for investors. As a result, we acknowledge we are amidst the bottoming process, and we don’t think the bull market is ending, as longer-term technicals continue to look strong, along with sentiment flashing levels of worry seen at other previous major market lows.”   Read More  »

First Quarter Earnings Preview: What to Watch

According to LPL Research, there is reason to believe there is another strong earnings season on tap.
“First quarter earnings season, which kicks off April 12–13, sets up to show solid growth, buoyed by tax reform.” Key takeaways include: The new tax law, solid economic growth globally, robust manufacturing activity, and a weak U.S. dollar set up another potentially strong earnings season. Key areas to watch this quarter include companies’ uses of tax law proceeds, reaction to trade tensions, and possible wage pressures. Though difficult to predict, results may help stocks stabilize by shifting investor attention away from trade headlines and toward strong company fundamentals. Read more from John Lynch, Chief Investment Strategist, and Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial here.

Q1 Has Been “Interesting” but Fundamentals Remain Strong!

LPL takes a look back at the first three months of 2018.
“Market volatility resurfaced in the first quarter of 2018, following the stock market’s calm and steady rise in 2017. This week’s Weekly Market Commentary recaps first quarter stock market performance, discusses some of the themes that were in play, and summarizes our outlook for the rest of the year.”   Read More  »

Five Favorite Predictors: Few Warning Signs Ahead

Our favorite leading indicators are signaling that further economic growth and stock market gains lie ahead.
“With the bull market celebrating its ninth birthday on March 9, we looked at some of our preferred leading economic and bull market indicators. We included LPL Research’s proprietary “Over Index” and two of the Five Forecasters (the Conference Board’s Leading Economic Index and stock market breadth), in an effort to help assess the likelihood that the bull market will reach its tenth birthday in a year. This week, we will look at the remaining three forecasters: the Treasury yield curve, the Institute for Supply Management (ISM) Manufacturing Index, and stock valuations.    Read More  »

Someone’s Having a Birthday!

The Bull is 9…Can it make 10? LPL Research writes, “The bull market will celebrate its ninth birthday on March 9, 2018. During that nine-year period, the S&P 500 Index nearly increased fourfold in value including dividends, producing a total return of 385% (19.2% annualized) while rising almost 300% in price. The recent market volatility, driven by fears of tariffs, inflation, and monetary policy, has many wondering if this is the end of the road for the bull market. So how much might the current bull have left in the tank? Given that we are not seeing the warning signs that have historically signaled the ends of past bull markets, including excessive equity flows and activity in initial public offerings and mergers and acquisitions, we would not be surprised if the current bull market celebrates its record tenth birthday next year. This week, we look at some of our favorite bull market indicators and the signals that accompany them.”   Read More  »