Down again. The S&P 500 Index opened sharply lower this morning, on the heels of a huge 4.9% oversold bounce yesterday, the largest single-day gain since December 26, 2018. There are now more than 1,000 cases of COVID-19 in the US, with many major events being cancelled or delayed until the summer. Stocks were higher yesterday on hopes of a payroll tax reduction, but this morning fiscal stimulus expectations are dampened, as both Democrats and Republicans have pushed back against the proposal in favor of more targeted measures.
Bear market without a recession? With the S&P 500 recently down 19% from the previous all-time high, many are wondering if stocks were to fall into a bear market, does that mean a recession is around the corner? Historically, the worst bear markets do take place during a recession, but not all of them. For example, going back to World War II, we found there were six bear markets that didn’t see the economy fall into a recession. You can read more of our thoughts here.
What does a payroll tax cut really mean? The Trump administration is floating the idea of a payroll tax reduction as a way to combat the COVID-19 economic slowdown. We’ve had many questions come in about what this could look like and what it could mean. We did a special Payroll Q&A on the LPL Research blog yesterday and you can read our thoughts here.
IMPORTANT DISCLOSURES
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This Research material was prepared by LPL Financial, LLC.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
If your representative is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union.
These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are:
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking 1-963717