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Stocks Resume Upward Momentum, Dow Lags on Boeing’s Woes.

Stocks Resume Upward Momentum, Dow Lags on Boeing’s Woes.

| March 15, 2019

Weekly Market Drivers | LPL Financial Research

Stocks Resume Upward Momentum, Dow Lags on Boeing’s Woes. 

US: S&P 500 Index +2.9%, Dow +1.6%, Nasdaq +3.8%
Europe: STOXX Europe 600 +2.8%, German DAX +2.0% France CAC 40 +3.3%, U.K. FTSE 100 +1.1%
Asia: Japan Nikkei +2.0%, China Shanghai Composite +1.75%, Korea KOSPI +1.8%
Rates/Commodities: 10-Year Treasury yield -5 basis points to 2.59%, WTI crude oil +5.1%, COMEX gold: -0.2%

U.S. equities rebounded from last week’s losses on the back of generally upbeat economic data and a lack of negative headlines.

Developments on the U.S.-China trade front were modest, though early-week headlines indicating that Beijing is “full of confidence” about the next stage of trade growth, along with data that showed Chinese exports surged 39.9% year over year in the first nine days of March, helped stocks get off to a fast start that halted the S&P 500’s five-day losing streak. U.S. economic data leaned positive and included a pickup in durable goods orders, a solid rebound in January retail sales, and stagnant consumer inflation readings that support the Federal Reserve’s recent pivot to a more accommodative monetary policy stance. Gains moderated over the balance of the week, but eventually the S&P 500 broke through a key resistance level (2817) that has plagued it for the past several months. A surge in technology stocks helped the Nasdaq rally nearly 4%, while a 10% skid in shares of Boeing dragged industrial stocks to the bottom of the sector rankings and prevented the Dow from keeping pace with the broader market.

Overseas, consumer inflation continues to stagnate across Europe, while the composite Eurozone saw a pickup industrial production last month despite Germany, the region’s largest industrial economy, registering a surprise decline. Elsewhere, U.K. policymakers voted to extend the March 29 deadline for the country’s pending separation from the European Union by two months after Prime Minister Theresa May again failed to secure a majority of votes for an updated deal (more on recent Brexit developments here). “The environment for investing in foreign developed stocks remains fragile, particularly in Europe,” said LPL Chief Investment Strategist John Lynch. “We suggest tactical investors maintain a wait-and-see approach.”

The Federal Reserve (Fed) meeting highlights the week ahead, though no rate hike is expected. Leading Economic Index (LEI) and Philadelphia Fed Business Outlook releases are also noteworthy. Overseas, attention in Europe will be focused on Brexit developments with the economic docket being light aside from Germany’s Producer Price Index and Eurozone consumer confidence readings. In Japan, import and export data are due out, along with LEI data on Wednesday. Track these and other important events on our Weekly Global Economic & Policy Calendar.

 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

Investing in foreign and emerging markets securities involves special additional risks. These risk include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.

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.

Basis Points are a unit relating to interest rates that is equal to 1/100th of a percentage point. It is frequently but not exclusively used to express differences in interest rates of less than 1%.

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.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

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.

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