World trade volumes contracted in June and the second quarter as the United States-China trade conflict impacted the amount of goods crossing borders. On a quarter-over-quarter basis, trade has contracted for three consecutive quarters.

This is not too surprising given the current trade environment. The slowdown in global trade has been significant since President Trump first slapped tariffs on washing machines in February 2018, and followed up with tariffs on Chinese imports in March 2018. As shown in the LPL Chart of the Day, Global Trade Has Slowed Significantly, world trade volumes have tumbled from 5-6% annual growth to a sl

U.S. consumers are feeling especially empowered these days, despite growing pessimism about the economic outlook.

As shown in the LPL Chart of the Day, Consumer Confidence Pushes Through Trade Uncertainty, the Conference Board’s Consumer Confidence Index fell to 135.1 in August. Still, that’s the fifth-highest reading of the economic cycle, an impressive feat given trade tensions and other global headwinds.

August’s strong consumer confidence reading was driven by a 19-year high in consumers’ views of present economic conditions. That’s no surprise to us, as steady gains in

We have lowered our projections for U.S. gross domestic product (GDP), the 10-year U.S. Treasury yield, and operating earnings for the S&P 500 Index in 2019, as we noted in the August 19 Weekly Market Commentary: Tweaking Forecasts, and introduced our preliminary 2020 forecasts. Over the next three weeks, we will highlight our reasoning behind these changes. Delayed prospects for a trade agreement between the United States and China remain central to our projections for economic growth and financial market performance in the coming months and quarters.

Tariffs and threats of escalation weigh on business investment. As we emph

Business investment remains a critical component for this economic expansion.

Capital expenditures (capex) drive productivity gains (more output per hour worked), which enables economic growth while keeping inflation contained. That helps keep the Federal Reserve (Fed) at bay.

We received an important data point on business investment yesterday, August 25. While headline durable goods orders beat expectations, demand for aircraft drove the increase. Excluding transportation, durable goods orders fell by 0.4%, and the prior month’s figure was revised down to 0.8% from 1%.

On a year-over-year basis,