For the first time ever, the S&P 500 just crossed 3,200, hitting its seventh round-number milestone of 2019, a year that has a good chance at being one for the record books.
With only two weeks left in the year to end, there is a surge in the S&P 500 by more than 28%, about 1 percentage point away from 2013’s gain of 29.6%.
In that case, it would be the best year in 22 years if it exceeds that one percentage point, when the benchmark jumped 31% in 1997.
The trade tensions between the U.S. and China has eased a lot which has led to a rush into equities. Owing to this, the S&P 500 has posted only one down week over the past 11 weeks. The two countries reached a “phase one” agreement that includes some rollback of tariffs and more agriculture buying from China. Investors also shrugged off the impeachment of President Donald Trump by the House as chances are slim that he will be removed from office.
Ryan Detrick, a senior market strategist at LPL Financial said that the majority of December’s gains in the S&P 500 have tended to happen toward the end of the month. So if history is any guide, the market could have a shot at topping 1997’s record.
According to a survey, the average 2020 year-end target of 3,330 represents a gain of about 4% from here. Optimism is rising that the global economy will snap out of its trade-induced slowdown and that sluggish earnings growth will start improving. Wall Street analysts are seeing more room for stocks to run next year but at a much slower pace.
“Corporates will be in the driver’s seat, and we think execution and delivering on earnings will be key to generating returns in 2020,” Savita Subramanian, head of U.S.equity strategy at Bank of America, said in a recent note. “The low interest rate environment continues to argue for favoring stocks over bonds.”