Main Office

9465 Counselors Row

Suite 200
Indianapolis, IN 46240
Market Update

Market Update

April 23, 2020

LPL Research on CNBC. LPL Financial Senior Market Strategist Ryan Detrick was on CNBC’s Power Lunch with Tyler Mathison Wednesday to discuss the drop in crude oil. You can watch the full video here.

Stocks opened higher. The stock market took another big number for weekly jobless claims—4.4 million—in stride and engineered another welcomed positive open. One reason for the gains in stocks this morning is that oil is higher for the second straight session, based on the WTI crude futures contract for June. The market’s ability to shrug off more devastatingly bad economic data—today’s Purchasing Manager’s Indexes (PMI)—is another piece of evidence that stocks are forward looking.

Jobless claims remain elevated. 4.4 million people filed a new claim for unemployment insurance in the week ending April 18, bringing the total to 26.4 million over the last five weeks. While the abrupt rise in lost jobs is unprecedented, the number of new claims declined for the third consecutive week. We still expect most of those jobs to return as the economy rebounds, with minimal structural damage to US labor markets.

Global PMI data reveals extent of shutdown impact. The Markit “flash” PMI data for the Eurozone was consistent with the consensus view that Europe entered a deep recession in March. The composite PMI for the region fell to a shockingly low 13.5. At 10.4, the services PMI for France nearly reached single digits, far from the 50 level that marks the breakpoint between expansion and contraction. US PMIs, due later today, are expected to be in the low 30s based on Bloomberg’s consensus forecast.

What a month. A month ago today, the S&P 500 closed down 33.9% from the all-time highs in one of the most vicious bear markets we’ve ever seen. A month later, now we have one of the greatest rallies in history. In fact, over the past month the S&P 500 added 25.1%, the greatest one-month rally since 1938. Looking at other massive one-month rallies reveals surprising strength over the coming 6- and 12-month periods. We will discuss this important concept later today on the LPL Research blog.

 

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

The term Futures refers to future contracts, a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset) at a predetermined future date and price. Contracts detail the quality and quantity of the underlying asset, and are standardized to facilitate trading on a futures exchange. Futures are used to either hedge or speculate on the price movement of an underlying asset, such as a physical commodity or financial instrument.

The fast price swings in commodities will result in significant volatility in an investor’s holdings. Futures and forward trading is speculative, includes a high degree of risk, and may not be suitable for all investors.

Any 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. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

If your representative is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor.  Registered representatives of LPL may also be employees of the bank/credit union.

These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union.  Securities and insurance offered through LPL or its affiliates are:

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use – Tracking 1-05002171