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Market Update: Mon, Mar 25, 2019

Market Update: Mon, Mar 25, 2019

| March 25, 2019
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Market Update: Mon, Mar 25, 2019 | LPL Financial Research


Daily Insights

We are bringing our recommended domestic equity allocation back to market weight. Stocks have had quite a run this year, with the S&P 500 Index up 12% year to date and 19% since the December 24 lows. The index now sits just 5% below record highs set on September 20, 2018. Given this move in stocks, coupled with a slightly weaker economic and corporate profit outlook, we believe it is prudent to readjust our recommended domestic equity allocation back to market weight. See today’s blog on and our latest Weekly Market Commentary due out later today for details.

March madness for yields. The NCAA tournament is off to a crazy start, but action in U.S. rates has been arguably crazier. The 10-year Treasury yield dropped through the end of the week, briefly falling below the 3-month yield intraday on Friday for the first time since August 2007. Yield curve inversion (or short-term rates falling below long-term rates) can be an ominous signal for the economy, as it’s preceded each of the nine recessions going back to 1955. We’ll outline our thoughts on the yield curve’s signals for the U.S. economy in this week’s Weekly Economic Commentary.

German business climate upbeat following Friday’s disappointing PMIs. The German Ifo Business Climate Index, a survey of roughly 7k firms, topped consensus estimates and prior month readings in both the current conditions and future expectations components. The data follow a string of flash PMIreports on Friday out of Europe, as well as the U.S., that painted a decidedly downbeat picture of the global economic landscape, spurring a broad selloff in stocks and an inversion at several key points in the Treasury yield curve (see above). It’s important to note that while the U.S. data showed a deceleration in business activity, both the manufacturing and services sectors remain in expansionary territory.

AG Report finds no evidence of collusion with Russia. In a letter to Congress the U.S. Attorney General (AG) said Special Council Muller’s report found no evidence of collusion between Russia and President Trump’s campaign team. Still, top democrats continue the call for the report to be made public after Muller failed to reach a conclusion as to whether the president obstructed justice, instead concluding there was insufficient evidence to bring charges. Market reaction was muted given already low expectations for impeachment or other significant consequence.

Week ahead. Two closely watched sentiment reports, including the University of Michigan survey, headline the U.S. docket. Abroad, Europe is gearing up for another vote in the U.K. Parliament that will help determine the extent of a delay (if any) beyond the March 29 Brexit deadline. Asia’s calendar is somewhat quiet outside of Japan, which gets inflation, retail sales, and unemployment reports. Track these and other important events on our Weekly Global Economic & Policy Calendar.


Click Here for our detailed Weekly Economic Calendar


  • N/A



  • Trade Balance (Jan)


  • GDP Report (Third Revision, QoQ Q4 2018)
  • Initial Jobless Claims (March 23)
  • Pending Home Sales (MoM, Feb)
  • Eurozone Economic Confidence Index (Mar)
  • Germany CPI Report (Mar)
  • Japan Jobless Rate (Feb)
  • Japan Tokyo CPI Report (Mar)
  • Japan Industrial Production (Preliminary Feb)
  • Japan Retail Sales (Preliminary Feb)


  • Core PCE (MoM Jan)
  • New Home Sales (MoM Feb)
  • University of Michigan Sentiment Index (Mar)
  • Germany Unemployment Claims Rate (Mar)
  • UK GDP Report (Q4 2018)
  • Eurozone CPI Report (Mar)
  • Canada GDP Report (Jan)



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All 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 performance referenced is historical and is no guarantee of future results.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured.  These products are not Bank/Credit Union obligations and are not endorsed, recommended or guaranteed by any Bank/Credit Union or any government agency.  The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

Index data obtained via FactSet


For Public Use – Tracking # 1-835445 (Exp. 3/20)

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