Market Update: Fri, Dec 27, 2019 | LPL Financial Research

Daily Insights

Seasonal tailwinds. Seasonal tailwinds have carried stocks this late in December in the absence of other headlines. The S&P 500 Index has climbed 0.6% this week through Thursday, poised for its 11th weekly gain in 12 weeks. Stocks’ persistent rally over the past two months has pushed the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite to new highs. Technology shares’ recent run has been especially impressive: The Nasdaq Composite has closed at 10 consecutive record highs for the first time since 1997.

Sentiment check. The S&P 500 is up about 32% year to date (on a total return basis), poised for its best year since 2013. We’ll see if stocks can push higher over the next few trading days and surpass the S&P 500’s 32.4% gain in 2013. Participation remains strong in the United States and abroad, a good sign for the health of the market. As we head into 2020, overly optimistic sentiment may be the biggest technical risk to watch.

Year of the consumer. At the beginning of 2019, trade tensions were heating up, and recession calls had grown louder. Many investors saw the end of the business cycle coming as the expansion was on the cusp of becoming the longest on record. Then, the consumer showed up in a powerful way. Today on the LPL Research blog, we’ll look back at the U.S. economy’s steady growth in 2019, and outline our expectations for the upcoming year.

 

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