On Wednesday, the S&P 500 Index closed above its 200-day moving average for the first time since March 4. While that move marks an important milestone for an index that has rebounded more than 35% from its March 23 low, we believe market internals may paint an even more promising picture for future stock returns.

Technology and growth stocks were undoubtedly the leaders during the market drop, and many of these stocks have recovered to the point of having positive year-to-date returns. Year-to-date numbers for financials and industrials have been less impressive, but that doesn’t mean they’ve been left behind in t

Despite the gradual reopening of the economy in several states, sentiment on Main Street remains suppressed, as the effects of COVID-19 appear to be keeping a lid on American optimism in the most recent Federal Reserve (Fed) Beige Book.

In the Beige Book, the Fed presents qualitative observations made by community bankers and business owners—or “Main Street”—about economic (housing, labor market, manufacturing, nonresidential construction, prices, tourism, wages) and banking conditions (lending conditions, loan demand, loan quality). At LPL Research, we maintain an indicator called the Beige Book Barometer

The S&P 500 Index flirted with closing above 3,000 yesterday, even as much of the economic data is some of the worst we’ve ever seen in our lifetimes. We are often asked how this is possible. The reality is the double backstop of historic fiscal and monetary policy combined with optimism over a potential vaccine coming before the end of 2020 has created a surge of market confidence, leading to a massive equity rally.

At the same time, much of the daily data regarding COVID-19 in the US continues to trend lower. “Yes, we have the same worries as everyone else regarding a spike in new cases as social distancing is r

First quarter earnings season offered something for everyone. On the positive side, corporate America produced solid results outside of the COVID-19 pandemic trouble spots, which included retailers, travel-related businesses, and banks. At the same time, 2020 earnings estimates have plunged, and a return to “normal” earnings could be two years or more away. 

Low Bar Proved Tough to Clear

At the beginning of the first quarter corporate earnings reporting season, we noted the earnings bar probably wasn’t set low enough, given the abruptness of the shutdowns in March. And that proved to be true, as S&