Recent stock gains may not just be about a better trade tone or renewed central bank support. U.S. economic fundamentals have also improved.

The Citi U.S. Economic Surprise Index, a running average of economic data compared to economists’ forecasts, has recently reached levels not seen since April 2018, as shown in LPL Research’s Chart of the Day. Stocks have climbed back near records as data has improved, and stronger economic trends could provide support for further advances.

Large economic surprises in recent data span key economic sectors and include building permits, housing starts, ser

As shown in the LPL Chart of the Day, the 10-year Treasury yield jumped 34 basis points (0.34%) in the week ending September 13, then gave back half that gain in a 17 basis point (0.17%) slide last week. The benchmark yield hasn’t moved at least 15 basis points (0.15%) in two consecutive weeks since November 2016.

The 10-year yield’s rapid ascent earlier this month was sparked by optimistic trade headlines and improving economic data, especially regarding inflation. On September 13, the 10-year yield jumped 12 basis points (0.12%) amid news that U.S.  retail sales topped expectations and that China

Since we began highlighting the return of fiscal leadership as a primary driver for economic and market activity nearly two years ago, we’ve seen the return to central bank dominance, particularly by the U.S. Federal Reserve. This has significant implications for global markets.

After a decade of easy money, the 2017 Tax Cuts and Jobs Act provided incentives for investment, and in 2018, the regulatory environment had eased and additional government spending programs further boosted demand. In fact, in our 2018 Outlook: The Return of the Business Cycle, we highlighted the return of fiscal leadership as a primary driver for e

Markets took several punches this week and have not gone to the mat. Investors woke up Monday, September 16, to news of the attack on Saudi Arabia’s oil facilities and surging crude futures prices. Economic data from China showed weaker than expected activity in August. The Federal Reserve (Fed) had to intervene and relieve short-term funding pressures in the U.S. money markets, pumping approximately $200 billion into the U.S. banking system. And, at the conclusion of its monetary policy meeting, the Fed lowered its target for the federal funds rate by 0.25%, to a range of 1.75–2%, a move that pleased some investors and disappoint