Mixed Market Messages
The LPL Strategic & Tactical Asset Allocation Committee (STAAC) determines the firm’s investment outlook and asset allocation that helps define LPL Research’s investment models and overall strategic and tactical investment thinking and guidance. The committee is chaired by the chief investment officer and includes investment specialists from multiple investment disciplines and areas of focus. The STAAC meets weekly to closely monitor all global economic and capital markets conditions to ensure that all the latest information is being digested and incorporated into its investment thought.
Key changes from January report:
- Downgraded view on the U.S. dollar from positive to neutral.
Investment Takeaways
Major averages succumbed to a risk-off tone in February, ending lower with the Nasdaq falling below the year-to-date flatline at month’s end. Sentiment was weighed down from multiple angles as economic growth and stagflation worries began to surface following soft consumer confidence data, sticky inflation, and a decline in retail sales. Plus, policy and trade uncertainty lingered in markets following the first round of U.S. tariff enactments and additional threats from the White House. Meanwhile, corporate America proved its resilience with 75% of S&P 500 companies topping earnings estimates with 97% of index constituents reporting, although, scrutiny around the artificial intelligence (AI) secular growth theme arose following mixed guidance takeaways.
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IMPORTANT DISCLOSURES
Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. Precious metal investing involves greater fluctuation and potential for losses.
Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.
Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.
All index data from FactSet.
The Strategic and Tactical Asset Allocation Committee (STAAC) is a division of LPL Research.
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