- Investors are expecting the stock market to remain upbeat towards the end of the year.
- The U.S Federal Reserve is more accommodative this year as compared to 2018.
- Global financial markets are turning green in unity, hinting at imminent upward rallies.
- U.S-China trade talks remain to be the wild card that can turn the markets red at any time.
The slump in the U.S stock market towards the end of last year still lingers in the debate revolving financial markets. Expectations for the end of this year, however, remain upbeat with investors anticipating strong bull rallies to close the year.
U.S Federal Reserve Is More Accommodative This Year
Those in favor of an entirely different pattern than last year in the closing months argue that the Federal Reserve is comparatively more accommodative this year. To begin with, investors were wary of the rising interest rates in 2018 while the U.S Fed has already cut rates three times this year. Powell’s announcement that the monetary policy is now on halt further rules out the possibility of an increase in interest rates in December.
Investors have also been reported to have highlighted that the global stock markets are turning green in unity that strengthens the prospect of further bull rallies in December. Market Strategist, Michael Antonelli of Robert W. Baird, echoed a similar stance and stated that conditions are significantly better in 2019 as compared to last year. He further added that the optimism is no longer confined to the U.S market but the global stocks have started responding that is fueling the investors’ expectations of ending the year on a positive note.
According to the financial experts, uncertainty circling the U.S – China trade talks is the only remaining wild card. While the negotiations have not been completed and crucial conflicts are yet to be resolved, optimism from the White House and Xi Jinping’s government regarding an imminent phase 1 deal appears to be sufficient in keeping the stock market green so far.
S&P 500 Index Has Remained Upbeat Through Much Of 2019
The benchmark S&P 500 index had printed a 19.8% drop in the last quarter of 2018. The index bottomed on Christmas eve losing another 2.7% and marked the largest Q4 decline since the market collapsed in 2008. SPX performance in 2019, however, has been exceptionally well so far. Having started the year at around 2,500, the index has remained upbeat for the most part has printed a year-to-date high of 3,120.
Analysts have also highlighted that Europe’s Stoxx 600 index was trading about 9% down in 2018 towards the end of the year. In contrast, the index has noted a remarkable 19% gain this year. Hitting the 407 mark, the index has printed a new high in over four years.
Amidst all the indicators hinting at a positive end to 2019, investors are recommended to keep an eye on the events of the U.S – China trade talks as complications on the trade front may turn the markets red within a matter of days.