In our earnings season preview, we expected a high single-digit increase in S&P 500 Index earnings for the quarter, and that is what we got. The consensus estimate coming into reporting season was calling for a 4.7% earnings gain, and now it looks like 10% is possible with more than 40 index constituents still left to report results.
Inflation moved to center stage last week with the release of April’s Consumer Price Index (CPI) and the Producer Price Index. Both numbers came near their 40-year highs but were lower than March’s year-over-year numbers. The results heightened investor anxiety about future Fed monetary tightening and its impact on economic growth.
Our resurgent economy grew at over a 6% pace in the first half of the year and is on track
for over 5% growth for the year when 2021 draws to a close. The current economic recovery,
which started in May 2020, has benefited from widespread vaccine availability and
additional fiscal stimulus. While the economy continues to move forward, we’re still
feeling the aftershocks of the COVID-19 Delta variant, whether through elevated inflation,
supply chain bottlenecks, or an imbalanced labor market. But 2021 also saw positives
MORE THAN MOST YEARS, it’s hard to look ahead to the next year, to 2021, without looking back at 2020. A global pandemic, a massive economic collapse, a bear market, a surprisingly sharp reversal, a hotly contested election where passions ran high, the impact of lockdowns—it was an unusual year of extraordinary challenges. In 2021 it’s time to restart the engines, but things are going to look different, feel different. 2020
has changed us, the way we do business, the way we connect. It’s also shown us our constants, what works for us, and what we hold on to.
AT LPL RESEARCH, as we look forward to the year 2020 and a new decade, some key trends and market signals will be important to watch, including progress on U.S.-China trade discussions, an encouraging outlook from corporate America, and continued strength in consumer spending. Trade risk, slower global growth,
AFTER NEARLY 10 YEARS of witnessing the U.S. economy and stock market recover—and thrive—investors are starting to wonder if we’ve seen all this expansion and bull market have to offer. Despite the market weakness we saw at the end of 2018, at LPL Research we expect the U.S. economy to grow in 2019 and support gains for stocks.
Over the past eight years extraordinarily accommodative monetary policy has served as the primary catalyst for spurring continued economic growth in the U.S. and around the globe.
Stock markets, bond markets, the economy, policy — some years they push and pull on each other lightly as markets follow their own path; in others, one influence, such as monetary policy, dominates. But sometimes, often following a period of change, understanding the pushes and pulls and how they interact becomes a key to reassessing market dynamics for the next year and beyond.