Weekly Market Commentary

BULLS ARE ON TRIAL

Adam Turnquist, CMT, Chief Technical Strategist, LPL Financial

A busy week of earnings, trade negotiations, and monetary policy meetings left the S&P 500 down around 0.5%. Buyer fatigue appeared to be setting in at this stage of the recovery as risk appetite from positive trade headlines faded by Friday. The broader market also faced major overhead resistance and profit-taking pressure from retail investors, who have been the backbone of the rally over the last month. Earnings continued to come in better-than-feared, but “tariff uncertainty” continued to get flagged on most conference calls. The Federal Reserve (Fed) kept rates unchanged and stuck to its patient approach with monetary policy, despite notable downgrades to economic growth estimates and rising recession probabilities since their last meeting.

Bottom line, we remain neutral on equities tactically as the risk-reward trade-off does not appear very attractive right now, and we cannot dismiss the chances of a reversal lower in the coming weeks.

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Paul King, CFP®, Registered Principal, LPL Financial, CA Insurance #0761042

Shannon Corpuz, Registered Representative, LPL Financial

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