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Strong Third-Quarter Earnings Could Follow Stock Drop | LPL Financial Market Signals Podcast

October 15, 2018

LPL Financial

LPL Financial research strategists, John Lynch and Ryan Detrick, discuss signs for strong third-quarter earnings and a year-end rally following the stock drop in this mid-October podcast.

We strongly believe fundamentals are sufficient to withstand this recent bout of volatility.

- John Lynch – Chief Investment Strategist at LPL Financial

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Last week stocks had their worst week since February and put in a mixed performance out of the gate Monday morning. In this week’s podcast, LPL Research’s strategists discuss why they think the odds are still strong for a year-end rally.

Both the S&P 500 and Dow fell more than 4 percent last week, while the Nasdaq dropped 3.7 percent. The S&P 500 also posted a third consecutive weekly loss—its longest such streak since June 2016—as investors remained concerned over rising US interest rates and geopolitical tensions. From a historical perspective, however, the recent volatility isn’t that unusual for the month of October. Third-quarter earnings are also looking strong, and there are signs that this could be the third consecutive quarter of 20% or greater earnings growth.

Tune in to the full podcast to learn more about the LPL strategists’ perspectives on what they see as a continuing bull market. 

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Corrections are quite normal, even in bull market years. We have seen three 5-10% corrections so far this year, which is right in line with an average year.

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The S&P 500 found support right at its 200-day moving average, a trend line which has provided support for more than two years now.

 

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