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October 28, 2019 - S&P 500 Brushes Record High

| October 28, 2019

U.S. stocks gained for a third straight week, and the S&P 500 Index brushed record highs. Stocks rose  as discussions around the United Kingdom’s (U.K.) exit from the European Union (EU) (Brexit) led to U.K. lawmakers rejecting a proposal to “fast‐track” a deal before October 31. The EU is considering  another Brexit deadline extension, a positive development for markets as it decreases the chance of a no‐deal Brexit. Stocks got an extra boost from positive trade headlines October 25, which briefly pushed the S&P 500 over its July 26, 2019, record closing high of 3,025.86 before closing slightly below that level.

Economic data took a backseat to headlines. Markit manufacturing Purchasing Managers’ Index (PMI) data released October 25 showed global manufacturing remained sluggish as the Eurozone and  Germany’s manufacturing PMIs remained well in contractionary territory (below 50). U.S. durable goods data also showed domestic demand continued to slow in September.

Global stocks climbed for a third straight week. The MSCI EAFE Index of developed‐market equities  rose 1.1% through October 24, poised for its third straight week of gains. The Euro Stoxx 50 Index rose to its highest level since January 2018 amid optimism that the Brexit deadline could be pushed out once again. The MSCI Emerging Markets Index rose 1.3% through October 24, reaching a three‐month  high.

Value stocks generally outperformed growth stocks during the week, even though the Nasdaq Composite led returns among major indexes we track. Energy led sector returns as oil prices jumped, while financials, industrials, and technology outperformed. Only consumer discretionary and real estate suffered losses for the week.

Fixed income markets trended sideways for a second straight week. The Bloomberg Barclays U.S. Aggregate Index, a composite of U.S. corporate and government bonds, was unchanged on the week through October 24. Global sovereign debt led all fixed income returns, while municipal bonds lagged. Still, the 10‐year U.S. Treasury yield climbed to a one‐month high October 25, even as Treasuries were relatively unchanged.

The U.S. dollar climbed after three straight weeks of losses. Oil prices rose the most in six weeks amid signs of a decrease in stockpiles. Gold prices increased, and copper prices climbed to a three month high.

Next week, the calendar is unusually packed with economic events. The most notable event will be the Federal Reserve’s (Fed) policy announcement October 30, followed by Fed Chair Jerome Powell’s post‐meeting press conference. U.S. investors will also get a look at updated Conference Board Consumer Confidence Index data, Personal Consumption Expenditures data, Markit and Institute for  Supply Management manufacturing data, the October nonfarm payrolls report, and the initial look at third‐quarter gross domestic product (GDP). It’ll be a busy week for earnings results as well, with more than 150 S&P 500 companies scheduled to report. Internationally, the third quarter Eurozone GDP report headlines the docket.



This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance the products or strategies discussed are  suitable for all investors or will yield positive outcomes. All performance referenced is historical and is no guarantee of future results. The economic forecasts set may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges.

Index performance is not indicative of the performance of any investment. Sector data is represented by S&P 500 GICS sub‐indexes.

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This research material has been prepared by LPL Financial LLC.

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