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.
Fed’s Latest Dots Project Four More Rate Hikes Before End
of 2019
– The Federal Reserve’s (Fed) interest rate projections are captured in the well-known “dot plot,” with each member’s estimate represented by an unlabeled dot.
– The latest dot plot shows policymakers project one more rate hike this year
(to a fed funds target rate of 2.25–2.5%), along with three hikes next year (to a range of 3–3. 25%).
Tracking #1-777850 (Exp. 10/19)
Download:
Share:
Source:
LPL Research, Bloomberg 09/26/18
Important Disclosures:
A Dot Plot is a chart showing the economic projections of Federal Reserve board members and Federal Reserve Bank presidents which includes forecasts for: inflation, unemployment, gross domestic product, and Fed funds rates.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in the presentation may not develop as predicted.
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.
Beige Book Barometer Suggests Moderate Economic Growth, Solid Labor Market
– The barometer’s reading was +71 in September, down from its July reading of +81 (which was the highest since January 2016), but above its 12-month rolling average of +67.
– The September reading indicates continued steady growth for the U.S. economy.
Tracking #1-773361 (Exp. 09/19)
Download:
Share:
Source:
LPL Research, Federal Reserve 09/12/18
Important Disclosures:
The Beige Book is a commonly used name for the Federal Reserve’s (Fed) report called the Summary of Commentary on Economic Conditions by Federal Reserve District. It is published just before the Federal Open Market Committee (FOMC) meeting on interest rates and is used to inform the members on changes in the economy since the last meeting.
The Beige Book Barometer is a diffusion index that measures the number of times the word “strong” or its variations appear in the Beige Book less the number of times the word “weak” or its variations appear. When the Beige Book Barometer is declining, it suggests that the economy is deteriorating; when the Beige Book Barometer is rising, it suggests that the economy is improving.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in the presentation may not develop as predicted.
The Next Three Quarters Are Historically Bullish for Stocks
– Beginning when the Dow started trading in 1896, each of the next two quarters have closed higher 73.3% of the time.
– The average returns over the next three quarters were 4.0%, 5.2%, and 3.6%—some of the strongest in the four-year presidential cycle.
Tracking #1-773359 (Exp. 09/19)
Download:
Share:
Source:
LPL Research, FactSet 09/15/18
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.
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.
<
>
Most Recent
Click on an image below to display:
U.S. Stocks Calendar Year Returns
Historically Bullish
for Stocks
Beige Book Barometer
Stocks and Rising Interest Rates
Fed's Latest Dot
Plot Projections
Stocks During Midterm Years
Volatility Is Normal
in October
Stocks After
Midterm Election
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
