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Market Update

| February 16, 2018
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Market Update: Friday, February 16, 2018


Market Recap

  • U.S. closed higher for fifth consecutive day; up 6% from February 8 low. Return to positive economic fundamentals, waning inflation fears, corporate earnings helping. S&P 500 Index +1.2%, Dow +1.2%, Nasdaq +1.6%, Russell 2000 +1.0%.
  • Interest rate proxy utilities led sector returns; technology, consumer staples outperformed as well. Energy was the only sector lower.
  • Positive breadth on NYSE (2.3:1) on muted trading volume (~92% of 30-day avg.).
  • Treasury yields near flat. 10-yr. note yield -1 basis point (-0.01%) to 2.90%.
  • Commodities: WTI crude oil recouped some recent losses (+1.5% to $61.49/bbl.), COMEX gold (-0.2% to $1355/oz.), industrial metals higher again across the board.
  • Economic data: Domestic industrial production softer than anticipated (-0.1% month over month vs. 0.2%). Federal Reserve’s (Fed) balance sheet grew week over week; Treasury holdings lightened, but reduction was outpaced by growth in mortgage back securities.

Overnight & This Morning

  • Domestic equities open slightly higher, extending rally following previous market dip. Volatility index back below 20 after spiking to 37.3 on February 5.
  • European stocks following U.S. higher despite poor U.K. January retail sales numbers; continued loose European Central Bankmonetary policy cited as a driver. STOXX Europe 600 +0.8%, DAX +0.4%, FTSE 100 +0.8%.
  • Most Asian markets closed for Lunar New Year’s holiday.Nikkei +1.2% despite ongoing yen strength; Japanese Finance Minister noted the government will act when needed to slow yen strength. Also, Bank of Japan chief Kuroda was renominated for a new five-year term.
  • China’s U.S. Treasury holdings increased last year–the most since 2010– up $126.5 billion to $1.18 trillion in December. China remains the largest non-U.S. holder.
  • Treasuries firming from yesterday’s close; 10-yr. yield -0.02% to 2.88%. Yields continue to support dollar against most major crosses.
  • Commodities: Oil lower overnight (-0.4% to ~$60.99/bbl); gold +0.1% to ~$1356/oz.; industrial metals continue positive streak.
  • Economic releases: U.S. housing starts kicked off the New Year strong; January figures beat expectations (1.326m vs. 1.232m).


Click Here for our detailed Weekly Economic Calendar


  • Import & Export Price Index (Jan)
  • Housing Starts & Building Permits (Jan)
  • U of Mich. Sentiment (Feb)
  • China: New Loan Growth and Money Supply (Jan)


Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

Stock investing involves risk including loss of principal.

Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.

Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.

Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards.

Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

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