Street View The Fed and a Look Ahead
LPL Research Chief Investment Strategist John Lynch offers his perspectives on the current challenges facing the markets, though he remains optimistic about U.S. economic growth prospects in 2019.
LPL Research believes the following three themes will be key to the markets:
LPL Financial Chief Investment Strategist John Lynch shares thoughts on policy, market, and economic implications.
The LPL Research team proudly presents the Midyear Outlook 2018: The Plot Thickens, with investment insights and market guidance covering the rest of the year.
LPL Research believes the following three themes will be key to the markets over the balance of 2018:
One of the most difficult questions we ask our clients is “Why is money important to you?” Most people react to the question with a look that says - What a ridiculous question (and you may have just had the same look). Take a moment to be truthful and answer the question. Here are some of the responses that we get: 1) Having money means I can pay the bills, 2) I can buy stuff I want, 3) I can leave money for my kids. How did you answer? Had you ever considered this question?
Where are we in the current economic cycle? Why may fiscal support and better business fundamentals be key themes in 2018?
I believe that each of us can learn from the attitudes and experiences of those that have come before us. This belief prompts me to glance through obituaries, looking for inspiration on how to live my life.
Thus far in 2017, an important shift has taken place in this economic cycle. The Federal Reserve has shown increasing trust that the economy has recovered and that market forces can keep it steady. Fiscal policy may now provide the backstop to the economy that monetary policy has provided throughout the expansion. The gauges say growth engines and market drivers may have changed: power down monetary policy, power up business fundamentals, and potentially take fiscal policy and economic growth off standby.
First question...how many stocks are in the S&P 500 index? Did you get the hint, hidden in the question? Second question…through mid-April, how many stocks in the S&P 500 index accounted for over 50% of the index returns in 2017?
Donald Trump has completed his landmark quest and will become the nation’s 45th president after a contentious and often divisive campaign. In addition, the Republican Party has retained control of both houses of Congress. This outcome marks a significant reversal from just a few weeks ago when a Hillary Clinton presidency was highly probable and even a Democratic Party sweep of Congress was possible.
While this outcome is certainly a shock to many, it is important to remember that the result isn’t a surprise to the plurality of American voters that spoke their collective will at the ballot boxes. The strength of a democracy is not in whether we like the outcome, but rather in how we accept the result as the voice and will of our republic.