Weekly Market Commentary

Each week the LPL Financial Research team assembles thoughtful insight on market news.

Will January’s Market Hit the Trifecta? The Seasonal Indicators

January 30, 2023 | LPL Research

The script has been flipped in 2023. Last year’s underperformers have turned into outperformers this year, driving the S&P 500 Index up over 5% this month. The pace and composition of the rally have left many investors skeptical over its sustainability, especially amid a lackluster earnings season thus far. Of course, the market is also forward-looking, with expectations for falling inflation and a less hawkish Federal Reserve (Fed) as we progress into 2023.

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A Feisty Bull-Bear Debate: Weighing the Pros and Cons

January 23, 2023 | LPL Research

The latest episode of the debate between stock market bulls and bears has gotten more interesting. For every valid point from one side, there’s an equally compelling argument on the other side. Perhaps the best reason for the debate is the uniqueness of this environment. The pandemic and its aftermath don’t come with a historical playbook. We haven’t been here before. So we’ll just recognize that the outlook is uncertain, weigh the pros and cons, glean what we can from the past, and give it our best shot. Call us cautious bulls.

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Q4 Earnings Preview: Pessimism May Be Overdone

January 17, 2023 | LPL Research

Fourth quarter earnings season is underway and probably won’t bring much good news. Lackluster global growth, ongoing profit margin pressures from inflation, and negative currency impacts are likely to translate into a year-over-year decline in S&P 500 Index earnings for the quarter. As always, guidance matters more as market participants look forward. The key question coming into this earnings season is whether the pessimism surrounding 2023 earnings has gone too far.

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Market, Stocks, and Bonds: Lessons Learned from 2022

January 09, 2023 | LPL Research

We believe accountability and modesty are among the keys to success in this business. In striving for those qualities, LPL Research has a tradition of starting off a new year with a lessons learned commentary. We got some things wrong last year, no doubt. But those who don’t learn from their mistakes are doomed to repeat them. Here are some of our lessons learned from 2022. As you might imagine, inflation and the Federal Reserve are common themes throughout.

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2023 Market Outlook: LPL Research Takes a Look at the Year Ahead

January 03, 2023 | LPL Research

2022 was a dizzying year as markets and the global economy continued to find itself out of balance due to the still present aftereffects of the COVID-19 pandemic and the policy response to it. If 2022 was about recognizing imbalances that had built in the economy and starting to address them, we believe 2023 will be about setting ourselves up for what comes next as the economy and markets find their way back to steadier ground.

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Historic Year for Central Bank Activity and Rate Hikes

December 19, 2022 | LPL Research

The Federal Reserve (Fed) wrapped up its last Federal Open Market Committee (FOMC) meeting of the year last week, where it hiked short-term interest rates for the seventh time in as many meetings, taking the fed funds rate to 4.5% (upper bound).

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December Down but Not Out: Seasonality Trends Point to Market Recovery

December 12, 2022 | LPL Research

Despite the S&P 500 Index starting December with five consecutive days of losses, we think December is down but not out. December often starts slow but historically has been a strong month.

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Resilient Consumers Have Not Saved Retail Stocks

December 05, 2022 | LPL Research

Economic and corporate data support the initial strong reads on holiday retail sales despite the macro headwinds, reinforcing the idea that today’s consumer is in a better position than usual at this point in the business cycle.

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Playbook for a Fed Pivot: Exploring Equity and Fixed Income Market Performance

November 21, 2022 | LPL Research

Recent inflation data has tempered expectations for future Federal Reserve tightening, including a potential peak in the terminal rate near 5.0% in May or June of 2023.

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Pockets of Vulnerability Magnified by Monetary Policy

October 10, 2022 | LPL Research

Investors are concerned that restrictive monetary policy, that is, tighter financial conditions, could lead to the kind of financial accident that dries up liquidity and delivers more harm to the global economy.

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Markets on Watch as Xi Jinping’s Influence to be Tested in October

October 3, 2022 | LPL Research

Over the next five years, China will likely be forced to focus on fixing its domestic problems as it tries to balance its capitalist designs with its inherent authoritarian posture.

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Why It May Be Time to Take Advantage of Higher Yields

September 26, 2022 | LPL Research

This year will go down as the worst year for bonds in the history of the Aggregate bond index, but with higher yields, we think the prospects for fixed income have improved.

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How Much Higher Can Rates Go?

September 19, 2022 | LPL Research

If there is a silver lining to the move higher in yields this year, it is that now there are a lot more opportunities within fixed income that can help investors achieve their income objectives.

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Getting Jobs Market Back into Balance

September 12, 2022 | LPL Research

More people will likely re-enter the workforce in the coming months, putting less inflationary pressure on the economy.

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September’s Calendar Cruelty for Stocks

September 6, 2022 | LPL Research

So will this September be another struggle? The combination of peak hawkishness from the Fed and the frustratingly slow pace at which inflation is cooling could continue to weigh on stocks for another month or more.

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Earnings Recap: Still Hanging In There

August 29, 2022 | LPL Research

The numerous challenges last quarter included a slowing economy, intensifying inflation pressures, ongoing global supply chain disruptions, and a surging U.S. dollar.

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Home Sales Fall (Again). What’s Next?

August 22, 2022 | LPL Research

Amid rising rates and a slowing economy, existing homes sold in July were on the market for only 14 days, three days less than a year ago

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Is This the Start of a New Bull Market?

August 15, 2022 | LPL Research

The lack of capitulation, still-high risk of a Fed policy mistake, and tinder box of geopolitical tensions suggest perhaps this rally may be due for a pause or even a bit of a retreat. But that doesn’t change our belief that stocks have more room to run through year end and into 2023.

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The Case for a U.S. Recession Weakens

August 8, 2022 | LPL Research

Although we are not likely in recession now, risks are rising for next year. The economy needs a stable and productive workforce to handle tighter financial conditions and growing uncertainty about 2023.

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What a Week for the Stock Market

August 1, 2022 | LPL Research

With analysts and strategists widely anticipating estimate cuts, the key to the market’s reaction to second quarter earnings is how well estimates hold up—and if those revised estimates are deemed credible.

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