Markets
Solid but Slower Earnings Growth in Q4; Bigger Slowdown
Lies Ahead
The Bar has been Significantly Lowered for the First Quarter
Stocks Take a Year to Recapture Pre-Bear Market Peaks
(Scroll down within chart to view all data)
Big Surge In 4-Week Highs
Large Thrusts of S&P 500 Index Component 4-Week Highs Have Led to Strong Future Returns
(Scroll down within chart to view all data)
February Can Be Weak For Stocks
Is the End Near for the Fed’s Rate Hike Campaign
A Super Bowl Appearance by the New England Patriots has not Historically Benefited Markets
(Scroll down within chart to view all data)
The Recent Bounce Could Have Bulls Smiling
(Scroll down within chart to view all data)
British Pound Showing Some Life Recently
Brexit Has Weighed on the U.K. Stock Market
Stocks Strong Gains After Government Shutdowns
(Scroll down within chart to view all data)
Strong but Slower Earnings Growth on Tap for Q4
Operating Margins on the Upswing
Big Drops in Stock Valuations Historically Followed
by Strong Rallies
(Scroll down within chart to view all data)
Higher Equity Risk Premiums Tend to be Followed by Better Stock Returns
Lower Stock Market Valuations Imply Better Long-Term Returns
U.S. Stocks’ Resilience in Non-Recessionary Periods
Not All Bear Markets Are Equal
(Scroll down within chart to view all data)
Possible Triple Bottom Forming on S&P 500 Index?
Inflation Expectations Dive Amid Healthy Wage Growth
Potentially Bullish Chart for Crude Oil
S&P 500 Trying to Recover from Volatile October
Stock Market Weakness Pressures China
Santa Comes in December
Fewer Companies Have Cited “Tariff” on Q3 Earnings Calls
Earnings Growth May Be Peaking, but 2019 Still Looks Pretty Good
Energy Stocks Have Not Kept Up with Oil
British Pound and Euro Drop to 1.5-Year Lows on Brexit Deal News
Gains During Midterm Election Years Tend to Come Late
A Big Year-End Bounce Is Possible For Stocks
Stock Market Performance Under a Unified or Split Washington
The Calendar Is a Bull’s Best Friend
Latest Stock Market Decline Leaves Valuations Attractive
–The latest S&P 500 Index pullback, which has been accompanied by rising earnings, leaves the S&P 500 at just over 15 times the next 12 months’ earnings estimates.
–That level is below the long-term average of 15.7 (since 1950) and the post-1980 average of nearly 16.7 (FactSet data).
Tracking #1-788094 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 10/26/18
Important Disclosures:
Forward price-to-earnings is a measure of the price-to-earnings ratio (PE) using forecasted earnings for the PE calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there is still benefit in estimated PE analysis. The forecasted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.
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. All performance referenced is historical and is no guarantee of
future results.
The opinions voiced in this material
are for general information only and are
not intended to provide or be construed
as providing specific investment advice
or recommendations for any
individual security.
The Largest Daily Changes Tend to Happen Beneath the
200-Day Moving Average
– The majority of the largest gains and losses for the S&P 500 Index from 1950–YTD took place beneath the 200-day moving average.
– With the S&P 500 currently beneath this important trendline, more volatility could be in store for investors.
Tracking #1-786426 (Exp. 10/19)
Download:
Share:
Source:
LPL Research,FactSet 10/25/18
Important Disclosures:
The modern design of the S&P 500
stock index was first launched in 1957. Performance back to 1950 incorporates
the performance of predecessor index,
the S&P 90.
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. All performance referenced
is historical and is no guarantee of
future results.
The opinions voiced in this material
are for general information only and
are not intended to provide or be
construed as providing specific investment advice or recommendations for any individual security.
Stocks Tend to Bounce the Last Part of October
– Month to date, the S&P 500 Index is heading for its worst month since February 2009 and the worst October since 2008.
– However, history shows the last few days of October are some of the strongest days of the year. With markets extremely oversold, the stage could be set for a rally.
Tracking #1-785984 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 10/24/18
Important Disclosures:
The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates
the performance of predecessor index, the S&P 90.
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. All performance referenced
is historical and is no guarantee of
future results.
The opinions voiced in this material are
for general information only and are not intended to provide or be construed as providing specific investment advice
or recommendations for any
individual security.
What Happens If You Miss the 10 Best and Worst Days
of the Year?
– If you could have avoided the 10 worst days of each year for the S&P 500 Index since 1990, you would have had average annual gains of close to 40%.
– Even if you missed the 10 best days of each year, you still would have been in the green six times (1991, 1995, 1996, 1997, 2013, and 2017).
Tracking #1-783699 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 10/16//18
Important Disclosures:
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. All performance referenced is historical and is no guarantee of future results.
The opinions voiced in this material
are for general information only and are
not intended to provide or be construed
as providing specific investment advice
or recommendations for any
individual security.
Corrections Are Normal, Even in Positive Years
– S&P 500 has produced a positive total return (with dividends) in 33 of the past 39 years going back to 1980, including 2018 year to date.*
– During that period, the average annual maximum peak-to-trough decline in the index was 14%. Even during positive years, the average maximum drawdown
in the index was 11%.
Tracking #1-783651 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 10/11/18
Important Disclosures:
*2018 data represents year-to-date performance through 10/11/18.
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. All performance referenced is historical and is no guarantee of future results.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.
Volatility Is Normal in October
– October should be known for volatility, not crashes, as no month has seen more 1% changes (up or down) for the S&P 500 Index going back to 1950.
– October is also about average in terms of its month-end returns (according to data back to 1950).
– Given the positive fundamentals, we expect the markets to weather this recent volatility and we see potential for a year-end rally.
Tracking #1-780797 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 10/10//18
Important Disclosures:
The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates
the performance of predecessor index, the
S&P 90.
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. All performance referenced i
s historical and is no guarantee of
future results.
The opinions voiced in this material
are for general information only and
are not intended to provide or be
construed as providing specific investment advice or recommendations for any individual security.
Stocks Are Usually Strong After a Midterm Election
– Looking at the past 18 midterms (back to 1946), the S&P 500 Index was higher a year later each time.
– This helps put in perspective just how much of a tailwind the calendar could be
for investors.
Tracking #1-780894 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 10/05/18
Important Disclosures:
The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1928 incorporates the performance of predecessor index, the S&P 90.
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. All performance referenced is historical and is no guarantee of future results.
The opinions voiced in this material
are for general information only and
are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.
October Tends to Be a Strong Month for Stocks During
Midterm Years
– We’ve just wrapped up the best quarter for the S&P 500 Index since Q4 2013.
– Historically, the last three months of the year have been the strongest,
particularly during midterm election years, so we could potentially see another
strong quarter ahead.
Tracking #1-777848 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, FactSet 09/28/18
Important Disclosures:
The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates
the performance of predecessor index, the
S&P 90.
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. All performance referenced i
s historical and is no guarantee of
future results.
The opinions voiced in this material
are for general information only and
are not intended to provide or be
construed as providing specific investment advice or recommendations for any individual security.
Stocks Have Historically Done Well During Periods of Rising Interest Rates
– Since 1996, stocks have risen with higher rates every single time (12 out of 12 times).
– Since 1962, the S&P 500 Index has gained an average of 6.1% during the rising rate periods, with gains in 83% of those periods.
Tracking #1-775867 (Exp. 09/19)
Download:
Share:
Source:
LPL Research, FactSet 09/21/18
Important Disclosures:
*Note that the current period of higher interest rates is still active and not included in the aggregated calculations.
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. All performance referenced is historical and is no guarantee of future results.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any
individual security.
Just How Often Do U.S. Stocks Return the Average?
– Since 1926, U.S. stocks have averaged 5–10% returns per year.
– However, only 7 times have the actual returns fallen in that range.
Tracking #1-770982 (Exp. 08/19)
Download:
Share:
Source:
LPL Research, Vanguard, MSCI 08/16/18
Important Disclosures:
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.
All performance referenced is historical
and is no guarantee of future results.
U.S. Stock returns are represented by the performance of the following indexes: the Standard & Poor’s 90 from 1926–March 3, 1957; the Standard & Poor’s 500 Index from March 4, 1957 to 1974; the Wilshire 5000 Index from 1975 to April 22, 2005;
and the MSCI US Broad Market
Index thereafter.
The opinions voiced in this material
are for general information only and
are not intended to provide or be
construed as providing specific investment advice or recommendations for any individual security.
<
>
Market Performance Under Unified or Split
Click on an image below to display:
U.S. Stocks Calendar Year Returns
Stocks and Rising Interest Rates
Stocks During Midterm Years
Volatility Is Normal
in October
Stocks After
Midterm Election
Corrections
Are Normal
10 Best and Worst Days of the Year
Stocks Tend
to Bounce
Largest Daily Changes
Valuations Attractive
After Market Decline
Big Year-End Bounce Possible for Stocks
The Calendar Is a Bull’s Best Friend
Gains During Midterm Elections
British Pound and Euro Drop
Energy Stocks Have Not Kept Up with Oil
Earnings Growth
May Be Peaking
Fewer Companies Cited "Tariff"
Santa Comes
in December
Trying to Recover from Volatile October
Market Weakness Pressures China
Potentially Bullish Chart for Crude Oil
Healthy Wage
Growth
Possible Triple
Bottom Forming?
Not All Bear Markets Are Equal
U.S. Stocks’ Resilience
Higher Equity
Risk Premiums
Big Drops in
Stock Valuations
Lower Stock
Market Valuations
Operating Margins
on the Upswing
Strong but Slower Q4 Earnings Growth
Stocks Gains After Govn't Shutdowns
Brexit and
U.K. Stock Market
British Pound
Showing Some Life
Recent Bounce Could Have Bulls Smiling
Super Bowl
Appearance
End Near for Fed Rate Hike Campaign?
February Can Be Weak for Stocks
Solid but Slower Q4 Earnings Growth
Strong Future
Returns
Big Surge in
4-Week Highs
Year to Recapture Pre-Bear Peaks
Bar Lowered for First Quarter
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.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit
