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Market Update: Thurs, Nov 14, 2019

Market Update: Thurs, Nov 14, 2019

| November 14, 2019

Market Update: Thurs, Nov 14, 2019 | LPL Financial Research

Daily Insights

Another record high. U.S. stocks are lower this morning, taking a step back after the S&P 500 Index’s seventh record high in three weeks. The benchmark eked out another record high on November 13, defying headlines suggesting the United States and China hit a snag in discussions of a limited trade agreement. Trade headlines have turned again this morning, with China announcing it will allow imports of qualified poultry from the United States. Investors are brushing off that optimistic headline for now.

Germany avoids a recession (for now). Germany’s gross domestic product (GDP) rose 0.1% in the third quarter, beating consensus estimates for a 0.1% decline, according to preliminary data. If Germany’s GDP declined last quarter, Europe’s largest economy would’ve been pulled into an economic recession for the first time since the beginning of 2013. Even though Germany’s GDP unexpectedly grew, we’re still cautious on developed-market economies and equities. Elevated global uncertainty has had an outsized impact on the euro area, and growth may not pick up much for a while. While we’re still cautious on developed market international economies and equities, growth in German GDP, albeit modest, is encouraging and adds to the mounting pile of evidence that global economic growth is stabilizing.

PPI growth slows. The core Producer Price Index (PPI), which excludes food and energy prices, rose 1.6% year over year in October, its slowest pace of growth since March 2017. Core PPI has steadily declined this year amid weakened global trade activity. However, lower wholesale price growth hasn’t yet weighed on U.S. companies’ consumer pricing power. We’ll continue to watch inflation data for broad trend changes, but for now, overall inflation growth still looks manageable. Check out our November 13 LPL Research blog post for more of our thoughts on U.S. inflation.

Global growth stabilizing. The Organisation for Economic Co-operation and Development’s latest update to its global leading economic indicators further confirmed that global economic growth is indeed stabilizing. While the readings for major countries were mostly down year over year, the organization upgraded its outlook for the euro area, Japan, and Russia. Only the United Kingdom saw its outlook downgraded. We discuss our outlook for global economic growth in today’s LPL Research Blog.



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