Equities

Investors endured another volatile five-day stretch as the combination of trade uncertainty, plunging global bond yields, and conflicting messages between the United States and global economies further pressured stock prices. It may seem hard to believe that the S&P 500 Index achieved record levels just three weeks ago, but that speaks to the curious nature of the current market dynamics, along with the seasonal weakness typically associated with the Dog Days of Summer, as August and September historically deliver the weakest monthly returns for the equity markets.

Indeed, the current volatility presents many conc

U.S. economic data has been sound this week, providing investors with good news amid a wave of conflicting headlines and market volatility.

Second quarter nonfarm productivity, released August 15, was an especially encouraging report. As shown in the LPL Chart of the Day, Nonfarm Productivity Picks Up, nonfarm productivity climbed 2.3% in the second quarter and 1.8% year over year.

Nonfarm productivity growth shows that U.S. companies are getting more output per employee, an important development in a late-cycle economy as productivity lifts gross domestic product (GDP) growth and keeps employer costs c

We continue to believe there is technical support for the S&P 500 Index as discussed in our August 9 blog, and we’re already seeing some signs of the pessimism that is necessary for forming a bottom. The negative sentiment intensified August 14 following the inversion of the yield curve (discussed in our August 14 blog), so today we want to take a closer look at some key levels the LPL Research team is watching.

First is resistance, or levels that an index or stock may struggle to rise above. Despite Tuesday’s 1.5% gain, the S&P 500 ran right into its 50-day moving average near 2,940. This level also marked th

A closely watched point on the Treasury yield curve has fallen negative for the first time in this economic cycle.

As shown in the LPL Chart of the Day, Yield Curve Inversion Raises Economic Questions, the spread between the 2-year and 10-year Treasury yields fell as low as  -2 basis points (-0.02%) in trading on August 14.

Typically, yield curve inversion, when long-term yields fall below short-term yields, is viewed as a signal of oncoming recession, although often with a relatively long lead. In the past five economic expansions, the U.S. economy has peaked an average of 21 months after the spre