Market Update: Thurs, Jun 25, 2020 | LPL Financial Research


Stocks struggling to regain footing. After Wednesday’s losses and headlines dominated by COVID-19, it won’t be easy for stocks to regain their footing today. The Nasdaq is holding up better and near flat this morning after its eight-session win streak ended yesterday. Asian markets were mixed on light holiday volume, with Japan among the laggards as the Nikkei dipped 1.2%. European markets are holding up relatively well and are mixed in midday trading.

Jobless claims remain stubbornly high. Filings for initial jobless claims totaled 1.48 million for the week ending June 20, above Bloomberg’s consensus forecast of 1.32 million and down only marginally from the revised 1.54 million reported for the prior week. The continuing claims number, reported with a one-week lag, dipped from 20.5 million to 19.5 million. While fresh filings for unemployment claims have fallen 12 straight weeks from a peak near 7 million in late March, the gradual decline in recent weeks and still staggering number of unemployed point to a long road ahead for the US job market to fully recover from the pandemic.

Pessimistic forecasts from the IMF. We believe the International Monetary Fund’s (IMF) new forecasts may be overly pessimistic, particularly their expectation for a nearly 5% contraction in global gross domestic product (GDP) this year. However, we find comparing their forecasts across regions instructive: They point to the sharpest declines in Europe and Latin America, and some of the smallest declines in Asia, including potential positive growth in China. Pandemic containment is only part of the story, but these growth forecasts support our continued preference for Asia over Latin America and emerging markets over developed international.

Do collateralized loan obligations pose a systemic risk? We’re seeing more news articles about collateralized loan obligations (CLO) and whether the growing size of this market poses a systemic risk to the economy. CLO’s complex nature, and perhaps a little bit of scar tissue, draw comparisons to other complex securities from 2008. We take a closer look at the CLO market and whether they pose a risk to the broader market in today’s LPL Research blog.

COVID-19 news. New US cases jumped to about 38,500 on Wednesday, an  increase of more than 60% over the prior week and one of the biggest daily increases of the crisis, according to the COVID-19 Tracking Project. New York, New Jersey, and Connecticut imposed quarantines for incoming travelers from hotspot states, while several states have paused re-openings, tightened social distancing restrictions, and added mask requirements. Hospital capacity is garnering increased attention (Source: COVID-19 Tracking Project).


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.

All index and market data are from FactSet and MarketWatch.

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.

  • 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
View All Posts