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Market Update: 09-09-19

Jerris Wealth Management Group LPL Research Weekly Market Update

CORPORATE EARNINGS OUTLOOK

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

We recently lowered our 2019 S&P 500 Index earnings growth forecast. In our August 19 Weekly Market Commentary, “Tweaking Forecasts,” we lowered our 2019 expectations for growth domestic product (GDP), the 10-year Treasury yield, and S&P 500 earnings per share (EPS). Our revised S&P 500 EPS forecast is now $165 for 2019, and we initiated a 2020 forecast of $175. Importantly, we have maintained our year-end fair value target on the S&P 500 of 3,000, as we expect lower interest rates and inflation to support higher valuations. Here we provide more background on our reduced earnings outlook.

Market Update: 09-03-19

Jerris Wealth Management Group LPL Research Weekly Market Update

U.S. TREASURIES AND THE YIELD CURVE

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

We expect the combination of a softer economic growth outlook with mild U.S. inflationary pressures and ultralow yields internationally to potentially translate into lower domestic yields. The uncertain U.S.-China trade situation has weighed heavily on business investment, resulting in weaker manufacturing activity worldwide. It is also important to note that trade challenges exist beyond the United States and China. The United States’ pacts regarding NAFTA 2.0, South Korea and Japan, and European automobiles are still unresolved. Despite a decade’s worth of global monetary policy accommodation, very few inflationary pressures are evident, presenting leading central banks with the need for further accommodation.

Market Update: 08-26-19

Jerris Wealth Management Group LPL Research Weekly Market Update

LPL’S U.S. REAL GDP FORECAST CHANGE

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

We have lowered our projections for U.S. gross domestic product (GDP), the 10-year U.S. Treasury yield, and operating earnings for the S&P 500 Index in 2019, as we noted in the August 19 Weekly Market Commentary: Tweaking Forecasts, and introduced our preliminary 2020 forecasts. Over the next three weeks, we will highlight our reasoning behind these changes. Delayed prospects for a trade agreement between the United States and China remain central to our projections for economic growth and financial market performance in the coming months and quarters.

Market Update: 08-12-19

Jerris Wealth Management Group LPL Research Weekly Market Update

THE NEW (AB)NORMAL

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial | Barry Gilbert, PhD, CFA, Asset Allocation Strategist, LPL Financial | Callie Cox, Senior Analyst, LPL Financial

Welcome to the updated LPL Research Weekly Market Commentary! This redesign incorporates the cleaner, more streamlined look you requested along with our informed insights on what’s happening in the markets now. As a bonus, each week you’ll also be able to link directly to our new Weekly Market Performance, which reviews top equity and fixed income indexes. We hope you like the new format and that you’ll continue to let us know what you want—and don’t want—from your LPL Research team. Thank you for your business.

Market Update: 08-05-19

Jerris Wealth Management Group LPL Research Weekly Market Update

SEASONAL SLUMP?

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

August has been one of the worst months for the stock market historically. In fact, it has been the worst month on average for the past 10 years, with the S&P 500 Index down an average of 0.78% for that month [Figure 1]. Last week’s 3.1% slide for the index certainly fit that pattern, which begs the question whether investors should buckle up for more seasonal losses this month. Despite last week’s losses, 2019 has been a good year for stocks — the S&P 500 is up 17% year to date through August 2 and, excluding any losses Monday, still stands just 3% from its all-time closing high on July 26. Here we summarize August’s lackluster track record and discuss whether this August will fit the pattern.

Market Update: 07-29-19

Jerris Wealth Management Group LPL Research Weekly Market Update

MORE ON FED RATE CUT IMPLICATIONS

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

The Federal Reserve (Fed) is likely to start an easing cycle this week, which has several investment implications. We have written a fair amount about the Fed’s U-turn in policy stance this year, including last week’s Weekly Market Commentary. That reversal from raising rates to presumably lowering them will become a reality if the Fed cuts rates at this week’s policy meeting, which concludes on Wednesday, July 31. Here we look at some potential asset allocation implications from this monetary policy transition.

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Susan Jerris

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