TAKING STOCK AT THE HALFWAY MARK
John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial
Even after such a strong first half of this year, we think stocks may have more left in the tank. The S&P 500 Index gained 17.4% during the first half of 2019 — an excellent performance — even though a decent chunk of those gains reversed the 2018 fourth quarter losses. Putting that six-month performance into perspective, it was the best start to a year for the stock market since 1997, and its tenth-best start since 1950. This week we recap the first half and analyze prior strong starts to see what we might expect in the second half of 2019.
The main drivers of the strong first half were the Federal Reserve’s (Fed) U-turn on monetary policy and progress on trade. The Fed’s reversal helped not only the market’s expectations for the U.S. economy but also supported stock valuations by pushing interest rates...