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Market Update: Wed, May 29, 2019

Market Update: Wed, May 29, 2019

| May 29, 2019
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Market Update: Wed, May 29, 2019 | LPL Financial Research


Daily Insights

China may weaponize rare earths. Reports from Chinese media suggest China may be considering weaponizing rare earths as a retaliatory measure in the U.S.-China trade dispute. Commentary in Chinese media included a Chinese phrase translating to “don’t say we didn’t warn you,” which is significant because it was used before the China-India and China-Vietnam conflicts. These threats have been lingering for a while, though, and there are ways that restricting rare earth exports could backfire on China. Overall, we still remain optimistic that a trade agreement will come soon, even if the talks hit speedbumps along the way.

Upbeat consumer confidence. The Conference Board’s Consumer Confidence Index rose to 134.1 in May (according to preliminary data), beating consensus estimates of 130. May’s rise in consumer confidence is closing in on the gauge’s 18-year high recorded in October. However, the cutoff date for this month’s preliminary data was May 16, so the data likely didn’t capture much of the fallout after the latest flare-up in U.S.-China trade tensions. Overall, a tight labor market, low unemployment, and healthy wage growth have helped support higher consumer confidence. Trade tensions, though, remain the primary threat to sentiment.

5% pullback coming soon? As of last night, the S&P 500 Indexwas down 4.9% from the peak on April 30, 2019. It is important to put things in perspective, as the S&P 500 gained more than 25% from the December lows in very quick fashion. Some type of pullback or correction would be perfectly normal after a move like that. Since 1990, the S&P 500 has averaged more than three separate 5% pullbacks per year. Pullbacks are a normal part of investing, which we discussed more in detail here.

Slowing, but growing. Leading indicators are slowing, but still growing. The Conference Board’s Leading Economic Index (LEI), which is one of our Five Forecasters, rose 2.7% year over year in April. However, we’re monitoring the LEI more closely these days, as April’s reading was the slowest year-over-year growth since February 2017. On the LPL Research blog later today, we’ll dig into the reasons behind the LEI’s recent slowing, and why we think leading indicators point to more economic gains ahead.


Click Here for our detailed Weekly Economic Calendar


  • Germany Unemployment Claims Rate (May)


  • GDP Report (First Revision, Q1 2019)
  • Initial Jobless Claims (May 25)
  • Pending Home Sales (MoM, April)
  • Japan Jobless Rate (Apr)
  • Japan Tokyo CPI Report (May)
  • Japan Industrial Production (Preliminary, Apr)
  • Japan Retail Sales (Apr)
  • China Manufacturing PMI (May)


  • Personal Income (MoM Apr)
  • Personal Spending (MoM, Apr)
  • Core PCE (MoM Apr)
  • University of Michigan Sentiment Index (May)
  • Japan Consumer Confidence Index (May)
  • Germany CPI Report (Preliminary, May)


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


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