The Plot Thickens

Three Themes For Market Trends In 2018

LPL Financial Research Publishes Investment Midyear Outlook

Expects U.S. Economic Growth To Pick Up in Pace in 2018. Read the entire report here.

CHARLOTTE, N.C., July 11, 2018 (GLOBE NEWSWIRE) — Leading retail investment advisory firm and independent broker/dealer LPL Financial LLC, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ:LPLA), today announced its research publication, “Midyear Outlook 2018: The Plot Thickens,” is available for download.

The report contains investment insights and market guidance covering the rest of the year.


LPL Research believes the following three themes will be key to the markets over the balance of 2018:

  • Fiscal policy remains key to growth
    Tax cuts, a more business-friendly regulatory environment and increased government spending could likely support consumer spending, business investment and corporate profits—key drivers of LPL Research’s economic and stock forecasts.
  • Looking at market peaks in context
    LPL Research believes we are starting to see peaks in several economic and market indicators, but given our current environment, that doesn’t mean a recession is necessarily around the corner.
  • Creating opportunity amid rising volatility
    LPL Research expects greater market volatility may be ahead, but reminds investors that experiencing these ups and downs is a normal part of our market environment. Instead of fearing it, there is the potential to create opportunities by embracing it and strategizing accordingly.

The midyear report maintains confidence in the existing forecasts reported in “Outlook 2018,” with some minor adjustments:

  • Economy
    GDP growth up to 3%. Early this year, LPL Research slightly upgraded the gross domestic product (GDP) forecast, as tax cuts could likely improve personal and business spending. LPL Research expects the combination of tax cuts, a new government spending package and financial deregulation to support continued growth.
  • Stocks
    10%+ total returns. Strong earnings are still expected to remain the key driver of stock market gains, thanks to the benefits of the new tax law. Although volatility is expected to increase, in the context of steady economic growth and strong corporate profits, LPL Research sees the potential for further stock gains in the second half of 2018.
  • Bonds
    Flat to low-single-digits. Accelerating global growth and rising interest rates continue to pressure bonds. The midyear report maintains the forecast of flat to low-single-digit returns for the Bloomberg Barclays U.S. Aggregate Bond Index, but notes that high-quality bonds may provide diversification benefits for investors’ portfolios.

Volatility Ahead

with factors such as increased trade tensions and geopolitical uncertainty at play, we do expect greater volatility may be ahead...

“Given that we are in the later stages of this economic cycle, with factors such as increased trade tensions and geopolitical uncertainty at play, we do expect greater volatility may be ahead. But it’s important to remember that experiencing these ups and downs is a normal aspect of our market environment,” said LPL Financial Executive Vice President and Chief Investment Strategist John Lynch. “Overall, we continue to see the potential for economic and market growth in 2018 and beyond. The LPL Research ‘Midyear Outlook 2018’ is here to provide the insightful commentary to help navigate the remainder of the year.”

Read the report: ,Midyear Outlook 2018: The Plot Thickens here.



About LPL Financial
LPL Financial is a leader in the retail financial advice market and the nation’s largest independent broker-dealer*. We serve independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.
Securities and Advisory Services offered through LPL Financial. A registered investment advisor, Member FINRA/SIPC.
*Based on total revenues, Financial Planning magazine June 1996-2018