S&P 500 Up 26% in 2019 – Santa Claus Rally Next?

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S&P 500 Up 26% in 2019 – Santa Claus Rally Next?

More good news for stock investors. Global and US stocks just hit a new 52-week high, adding to a great year.

  • The S&P 500 (SPY) is up +27% on the year.
  • The tech-heavy NASDAQ (QQQ) is up +33%.
  • The Vanguard Global Stock Market (VT) is up +23%.

Take a look at the big gains in the chart below.

There are a few reasons why stocks are doing so well.

US and China Trade Deal: Regardless of the exact details of the new trade deals forming between the US and China, stocks are not very worried about it. Market has become largely desensitized to the story.

Central Banks Pumping Billions into Financial System: Central banks across the world have been very busy pumping hundreds of billions in cash into the global financial system to keep interest rates low and stimulate economic growth.

Corporate Earnings are Pretty Good: The S&P 500 is having a good year with corporate profits up from last year and once again hitting a new all-time high.

Global and US economies Grew Nicely in 2019: US and global economies had a solid year in 2019. US economy is on pace to expand around 2.0% and the global economy is on pace to expand about 2.5%. That’s a far cry from a recession with 0% economic growth.

What Should We Expect for Last Two Weeks of the Year?

I am expecting more gains in the last two weeks of 2019.

December is a historically strong month for US stocks.

And it looks like the market is ready for a Santa Claus rally.

Here’s more from Investopedia.

A Santa Claus rally describes a sustained increase in the stock market that occur in the last week of December through the first two trading days in January. There are numerous explanations for the causes of a Santa Claus rally including tax considerations, a general feeling of optimism and happiness on Wall Street and the investing of holiday bonuses.

Another theory is that some very large institutional investors, a number of whom are more sophisticated and pessimistic, tend to go on vacation at this time leaving the market to retail investors, who tend to be more bullish.

Let’s keep our fingers crossed that we see a nice Santa Claus rally.

But even if it doesn’t happen it’s been a great year for the stock market and there’s a lot to be thankful for.

Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading.

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