July 03, 2019
Happy Birthday, United States of America! As we celebrate our nation’s birthday, U.S. leadership on the world stage remains in focus. We received good news on the global trade front from the recent G20 Summit in Japan. President Trump and China’s President Xi agreed to a trade truce, clearing the way for the two nations to resume negotiations—and helping the stock market add to its impressive first half of 2019. In signs of thawing tensions, the next round of U.S. tariffs have been suspended indefinitely, and U.S. companies were cleared to sell certain products to Chinese telecom giant Huawei.
At the same time, we have no indications that the sticking points that caused talks to derail in May are any closer to being resolved, and existing tariffs remain in place. A broader agreement most likely can be reached this year—hopefully by fall—but we may have to endure more economic upheaval until then.
Closer to home, the Federal Reserve (Fed) has sent signals that it may cut the fed funds rate by .25% in July, thereby reversing its December 2018 rate hike. A potential rate cut could be considered insurance against further slowing of the economy, and it still appears the odds of near-term recession remain low.
Another positive is the Fed’s willingness to adjust its policy in ways that may help prolong the current economic expansion, which at 121 months is now the longest ever recorded. Despite its record-setting length, this cycle potentially has more room to run given its gradual growth trajectory in the United States and the lack of excesses building up since the 2007–2008 financial crisis. Fiscal stimulus put in place over the past two years by the Tax Cuts and Jobs Act of 2017 also helps.
Second quarter ended June 30, and earnings season, when most publicly traded companies release their quarterly earnings reports, is fast approaching. The favorable fundamental backdrop for the U.S. economy may provide support for further corporate earnings growth in the second half of the year and into 2020. Better than expected earnings could help drive stock market gains in the second half of 2019, although the pace of earnings growth may be modest as we continue to deal with tariffs and trade uncertainty.
Underlying economic fundamentals, along with a supportive Fed and progress on global trade, have the potential to enable the U.S. economy to continue to grow steadily through the end of 2019 and beyond. However, as noted in the recently published LPL Research Midyear Outlook 2019: Fundamental: How to Focus on What Really Matters in the Markets, we may have to tolerate more market volatility while trade details are ironed out, and some pullbacks in the markets should be expected. It’s important for all investors to be prepared to weather some volatility, and suitable investors can use it as an opportunity to rebalance portfolios to align with long-term objections.
Please feel free to contact me with questions, and happy Fourth of July.
Important Information
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. All performance referenced is historical and is no guarantee of future results.
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.
Economic forecasts set forth may not develop as predicted.
All data is provided as of July 2, 2019.
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. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
July 05, 2022
June 07, 2022
May 31, 2022
May 20, 2022
February 24, 2022
June 30, 2021
March 25, 2021
March 11, 2021
March 05, 2021
February 10, 2021
February 09, 2021
February 05, 2021
February 04, 2021
January 28, 2021
January 28, 2021
January 14, 2021
January 14, 2021
January 14, 2021
January 14, 2021
January 13, 2021
January 07, 2021
December 16, 2020
December 16, 2020
December 10, 2020
December 10, 2020
December 10, 2020
December 09, 2020
December 09, 2020
December 09, 2020
December 09, 2020
December 07, 2020
December 04, 2020
December 03, 2020
December 03, 2020
December 03, 2020
December 03, 2020
December 02, 2020
December 02, 2020
December 02, 2020
December 02, 2020
December 01, 2020
December 01, 2020
November 25, 2020
November 24, 2020
November 20, 2020
November 19, 2020
November 19, 2020
November 09, 2020
November 01, 2020
October 28, 2020
October 22, 2020
October 22, 2020
October 21, 2020
October 21, 2020
October 21, 2020
October 21, 2020
October 21, 2020
October 15, 2020
October 15, 2020
October 15, 2020
October 15, 2020
October 14, 2020
October 14, 2020
October 13, 2020
October 08, 2020
October 08, 2020
October 08, 2020
October 08, 2020
October 07, 2020
October 06, 2020
October 02, 2020
October 02, 2020
October 02, 2020
October 02, 2020
October 01, 2020
September 29, 2020
September 24, 2020
September 24, 2020
September 24, 2020
September 24, 2020
September 23, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 17, 2020
September 17, 2020
September 17, 2020
September 16, 2020
September 16, 2020
September 16, 2020
September 16, 2020
September 16, 2020
September 11, 2020
September 11, 2020
September 11, 2020
September 11, 2020
September 11, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 09, 2020
September 09, 2020
September 09, 2020
September 09, 2020
September 09, 2020
September 08, 2020
September 08, 2020
September 02, 2020
September 02, 2020
August 28, 2020
August 28, 2020
August 27, 2020
August 26, 2020
August 26, 2020
August 26, 2020
August 26, 2020
August 21, 2020
August 06, 2020
August 06, 2020
August 04, 2020
July 31, 2020
July 30, 2020
July 28, 2020
July 22, 2020
July 21, 2020
July 20, 2020
July 14, 2020
July 14, 2020
July 13, 2020
July 12, 2020
July 07, 2020
July 01, 2020
June 30, 2020
June 23, 2020
June 16, 2020
June 09, 2020
April 08, 2020
March 16, 2020
March 12, 2020
February 28, 2020
February 25, 2020
January 31, 2020
August 05, 2019
July 03, 2019
June 28, 2019
June 28, 2019
June 28, 2019
June 19, 2019
June 12, 2019
June 07, 2019
May 28, 2019
September 18, 2018
September 07, 2018
August 26, 2018
August 26, 2018
August 26, 2018
March 05, 2018
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
The LPL Financial registered representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, AK, AZ, CA, DC, FL, GA, IN, KY, LA, MI, MO, MS, NC, NV, NY, OH, SC, TN, TX, VA, WA, WI.
Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.
4485 Tench Rd Ste 2510
Suwanee, GA 30024