Financial Insights

Strong Fundamentals & Positive Technical Evidence Suggest We May Be Out of the Woods

February 21, 2018 | posted in: Blog, Financial Insights, LPL Weekly Market Commentary | by

In answer to the question “Are we out of the woods yet?”,  LPL Financial’s John Lynch, Chief Investment Strategist, and Jeffrey Buchbinder, CFA Equity Strategist, answer:  “After the fastest correction from a record high in the history of the S&P 500 Index, stocks staged an impressive comeback last week. The S&P 500 put together its best week since 2013, rallying more than 5% off the lows to bring its session win streak to six. This week we consider what this means moving forward, including what higher interest rates and rising inflation might mean for stocks.” Other key takeaways include the facts that: Stocks have made a significant comeback, rallying nearly 6% off the recent lows. Solid fundamentals and technical indicators suggest that recent lows may hold. Historical relationships suggest stocks and yields can move higher together and stock valuations are justified based on current Read the full article from LPL Research here.

Where Might Stocks Go From Here & What To Do About It?

February 13, 2018 | posted in: Blog, Financial Insights, LPL Weekly Market Commentary | by

After an extraordinary two-year period of market calm, the major U.S. equity markets slipped into correction territory last week.
John Lynch, LPL Financial’s Chief Investment Strategist, shares his thoughts on the topic: “A perfect storm of investor worries collided over the past six trading days, including inflation, monetary policy, and the unwinding of crowded, complex trades. The result was an unprecedented bout of market volatility, highlighted by 1,000-point swings in the Dow Jones Industrial Average and the fastest retreat ever (nine days) from a record level in the S&P 500 Index to a correction.” Key takeaways include: A perfect storm of investor worries collided over the past six trading days, resulting in an unprecedented bout of market volatility. These experiences provide a good opportunity for investors to reassess current allocations relative to long-term targets. We [LPL] maintain our year-end S&P 500 fair value estimate of 2850–2900, representing a move of approximately 10% from current levels. Read the complete article here.

Austin Frye Interviewed by Consumer Reports About Preventing Elder Financial Abuse

February 9, 2018 | posted in: Blog, Financial Insights, In The News | by

Regulators are stepping up efforts to protect seniors, but you still need to build your own safety net.
  According to Penelope Wang of Consumer Reports, “By one estimate, older Americans lose up to $30 billion a year to elder financial abuse—the misappropriation of their money by con artists or thieves who are total strangers to them or even trusted friends or family members.  These crimes often go unreported because victims are ashamed to speak up or are unable to do so.  But that may soon start to change. The government and the financial services industry are finally taking steps to encourage people who are in a position to spot elder financial abuse—including brokers, bankers, and financial advisers—to act on and report what they see.”   Austin shared his thoughts about how to prevent elder financial abuse:   Read More  »

Don’t Let Recent Bumpiness Throw You…

…the Fundamentals are Looking Good for the Year Ahead.
According to LPL Research, “After 18 months of extraordinary calm, volatility returned these past several days, as trading volumes surged and equity markets plunged. The primary culprit was higher than expected wage growth in the January jobs report, which may have increased fears that the Federal Reserve (Fed) would be more aggressive with interest rate hikes in 2018. However, the selling pressure unmasked a variety of issues, including investor complacency and the difficulty of unwinding crowded and complex trades involving leverage, or borrowed money. Though never any fun to endure, pullbacks are a normal course for long-term investing. It is important to note that that this market weakness is occurring against the backdrop of solid growth in the U.S. economy and corporate profits. Fiscal policy changes may help support growth in personal consumption and business investment. Moreover, this growth is not simply a domestic phenomenon, as global economies are exhibiting similar patterns boosting both demand and earnings.   Read More  »

Melt-up or Melt-Down?

Did stocks just melt-up, setting up a possible melt-down?
Friday’s sharp decline, the biggest since the Brexit vote in June 2016, might have led us to forget that just a few days ago many claimed the stock market was melting up. The strong finish to 2017 followed by big gains in January certainly made this a reasonable characterization. (Though we continue to believe stock valuations are well supported by fundamentals here.) Key takeaways include: Friday’s sharp stock market decline might have led us to forget that just a few days ago many claimed the stock market was melting up. Now concerns have turned to whether last week’s sell-off is the start of something much bigger. We discuss whether stocks have melted up or if they are about to melt-down, and share some thoughts on the sharp move higher in interest rates. Click here to read more from John Lynch Chief Investment Strategist, and Jeffrey Buchbinder, CFA Equity Strategist, of LPL Financial.

Records, Risks, and Returns

From LPL Research: “The equity market action over the past year is truly historic on many levels. It is important to recognize how unique this time frame has been and that a more volatile 2018 may be likely, and quite frankly normal. This week we will highlight some of the amazing streaks that have taken place, list a few of the reasons why we should anticipate a pickup in volatility, and explain how any possible weakness can provide suitable investors with an opportunity in diversified portfolios.” Key takeaways include: The recent lack of volatility in the U.S. stock market has been historic on many levels. The long absence of market volatility greatly increases theodds that 2018 may see multiple pullbacks. We believe strong global fundamentals may offer an opportunity to use potential pullbacks as a chance to add to portfolio positions. Click here to read more from John Lynch Chief Investment Strategist, and Ryan Detrick, CMT Senior Market Strategist, of LPL Financial.