Daily Insights

China exports surged in early March, according to China. Official data released over the weekend showed that exports surged 39.9% year over year in the first nine days of March, while officials also said that it’s normal for there to be fluctuations around the Lunar New Year holiday and that Beijing is “full of confidence” about the next stage of trade growth. The timing of the release suggests officials are looking to shore up confidence after recently-released February data showed a ~21% drop in exports.

German industrial production stalls. Industrial production figures out of Germany showed an unexpected decline in activity vs. the prior month as the auto industry’s woes continue. The data came on the heels of a surprise 2.6% decline in factory orders in February and the European Central Bank’s significant cut to its 2019 gross domestic product (GDP), forecast (from 2.8% to 2.1%). And while January figures for both industrial production and factory orders were upwardly revised for January, the environment remains fragile, and we suggest maintaining a wait-and-see approach to investing in foreign developed stocks-particularly Europe-for tactical investors.

Retail sales rebound. Retail sales rose 0.2% in January, rebounding strongly from December’s unexpected drop in sales, which was the biggest monthly slide since 2009. Today’s report showed December’s slide was revised lower to -1.6%, another sign that consumer spending declined significantly towards the end of 2018. Control-group sales, which are used to calculate GDP rose 1.1% in the month, the biggest jump since February 2014. While we expect softer growth in Q1 2019 for a variety of reasons, January’s bounce back in retail sales is encouraging, as consumer spending constitutes about 70% of GDP.

Modest pullback or something bigger? Following the strong 2019 rally, are stocks overdue for a pullback? The S&P 500 Indexhas rallied 17% since the December 24, 2018 low, a surprise to many given widespread concerns about slower global growth, trade uncertainty, and the age of the bull market-which turned 10 last weekend. Following that strong rally, a pullback is to be expected; but we don’t think it will get much worse than last week’s 2.1% drop, for reasons discussed in our latest Weekly Market Commentary, due out later today.

Beige Book sentiment at 7-year low. Pessimism has rapidly infiltrated Main Street’s outlook, according to the latest Federal Reserve (Fed)  Beige Book.Our Beige Book Barometer (BBB), which measures the count of strong words relative to weak words, fell to the lowest level since 2011 in the edition released March 6. Context is key to this BBB reading though, especially considering the complicated macroeconomic environment. We’ll analyze what’s driving negative Main Street sentiment on the LPL Research bloglater today, and in this week’s Weekly Economic Commentary.

Click Here for our detailed Weekly Economic Calendar

Monday

• Retail Sales (Jan)
• Germany Industrial Production (Jan)

Tuesday

• NFIB Small Business Optimism Index (Feb)
• CPI Report (MoM, Feb)
• UK Industrial Production (Jan)
• Japan PPI Report (Feb)

Wednesday

• PPI report (MoM Feb)
• Duable Goods Orders (Preliminary, MoM, Jan)
• Eurozone Industrial Production (Jan)
• China Industrial Production (Feb)
• China Retail Sales (Feb)
• China Surveyed Jobless Rate (Feb)

Thursday

• Import Price Index (MoM Feb)
• Export Price Index (MoM Feb)
• Initial Jobless Claims (March 9)
• New Home Sales (MoM Jan)
• Germany CPI Report (Feb)
• Bank of Japan Rate Decision (Mar)

Friday

• Industrial Production (MoM Feb)
• JOLTS Job Openings Report (Jan)
• University of Michigan Sentiment Index (Preliminary Mar)
• Eurozone CPI Report (Feb)

IMPORTANT DISCLOSURES

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.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

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

Member FINRA/SIPC

For Public Use – Tracking # 1-830645 (Exp. 2/20)