- LPL Market Signals Podcast. Listen to the latest Market Signals podcast, in which Chief Investment Strategist John Lynch and Senior Market Strategist Ryan Detrick discuss the potential effects of midterm elections, recent rate hikes, and other events on investors and the economy. Market Signals by LPL Financial is now available on iTunes, Google Play and Spotify. Please join our discussion on social via #LPLMarketSignals.
- China tumbles after week off. Chinese stocks plunged in Monday trading (-4.0%) and the yuan fell nearly 1% versus the dollar after markets reopened following a week off. The slide came despite the central bank cutting the required reserve ratio for the fourth time this year to boost growth; lenders may reduce the amount of cash they hold by 1% beginning October 15th. It’s still not clear if the extra liquidity can put a floor under the market, which is down more than 15.0% year to date.
- Global equities overview: Favor U.S., stick with emerging markets (EM). U.S. economic and earnings growth continue to stand out globally and support our positive view of U.S. equities for global equity allocations, as we discuss in our latest Weekly Market Commentarydue out later today. Despite this year’s underperformance, we continue to see solid upside potential in EM due to attractive valuations, superior economic growth, favorable demographics, and the potential for resolution to the U.S.-China trade dispute later this year. Our cautious outlook for international developed equities is driven primarily by a lackluster economic growth outlook and structural concerns in Europe.
- Global economic overview: Global GDP remains solid, underpinned by U.S., EM. Investors have digested a flurry of economic tailwinds and headwinds this year, and we’ve tried to make sense of these crosswinds in our global economic projections. Overall, we expect solid economic growth in developed economies, thanks to a continued expansion in the U.S. However, we expect the pace of growth in developed economies to slow going into next year as the Federal Reserve tightens policy further and Europe struggles with fiscal and political issues. While EM have had a rough year, we think EM economies have the highest growth trajectory of global regions. Read more later today in this week’s Weekly Economic Commentary.
- The good news about midterm elections. Equity markets found volatility late last week, but there is some good news for longer-term investors. That’s right, going back to 1946, we found the S&P 500 Index has been higher a year after the midterm election every single time – that is 18 out of 18 with higher market returns. Today on the LPL Research blog we will take a closer look at this bullish phenomena.
- Light week for economic calendar. However, there are some U.S. notable releases this week including the producer and consumer price indexes and the University of Michigan Consumer Sentiment Survey. Abroad, investors will be scrutinizing import-export data, trade balance figures, and Chinese foreign direct investment to help gauge the impact of ongoing tensions. Track these and other important events on our Weekly Global Economic & Policy Calendar.
- Japan Current Account Balance (Aug)
- CPI Report (Sep)
- Initial Jobless Claims (Oct. 6)
- China Trade Balance (Sep)
- China Imports/Exports Data (Sep)
- Import Price Index (MoM, Sep)
- Export Price Index (MoM, Sep)
- Eurozone Industrial Production (Aug)