U.S. stocks are sitting at the same level they were seven months ago, but the path has certainly not been straight. Equity investors have been on a bumpy ride since September 2018, and investors’ resolve has been tested amid back-and-forth in trade negotiations, a historic government shutdown, Brexit, the Federal Reserve’s (Fed) U-turn in policy, and signs of a global slowdown.

Fortunately, the S&P 500 Index weathered a steep decline late last year and has found its way back to around record highs. Stocks’ historically strong start to the year has been promising, but there are still signals that more weakness could be in store before the S&P’s next leg higher.

What are some of the challenges? Gauges of U.S. manufacturing health have sputtered around multi year lows, retail sales have slowed considerably, and agriculture prices have dropped about 20% since the first tariffs were initiated. Raw material costs have also risen amid global trade disruption, and companies are struggling to raise prices to account for higher expenses. Trade-related repercussions are clearly disrupting Main Street’s operations, but LPL Research expects these impacts to subside as the United States and China hopefully near a trade resolution. Global data has improved recently, encouraging LPL that economic activity in other economies has picked up enough to boost demand. China data has rebounded across the board, global manufacturing activity gauges have stabilized, and global leading indicators have perked up. Global economic progress could be stop-and-go, like it has been for most of this expansion, but even a slight recovery could provide crucial support for consumer and business sentiment worldwide.

The rise in oil prices recently will obviously help energy companies recover from the steep decline oil experienced in the last few years. Continued low interest rates and inflation also remain a plus for the economy as the Fed remains somewhat benign in its management of the Fed Funds Rate and keeps rates at a relatively low and stable level.

Now that tax season has ended, we will be sending out more notices asking clients to go online to our Legacy Wealth Planning website to make in office or phone appointments with me. This new system has been favorably met by our clients. Of course, calling in to Rose to make an appointment is still available. Spring weather has finally arrived in Reno – we hope you all had a Happy Easter and look forward to our next meeting. – Mark

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Economic forecasts may not develop as predicted. Some of this research material has been prepared by LPL Financial. All indices are unmanaged and may not be invested into directly. Referenced material: LPL Research Weekly Market Commentary and LPL Research Weekly Economic Commentary, both dated April 22, 2019. Approved Tracking #: 1-845956.