The stocks have had a phenomenal year so far, and they are leading straight towards the month that is usually considered the best of all.
Thanksgiving week was amazing for the market and the S&P500 has also been more 25% for this year. However, because of the Thanksgiving holiday, stocks had been a bit lower this Friday. Through Wednesday, NASDAQ, Dow, and S&P500 were all set to brand new record peaks, with tech names and consumer discretionary heading the market higher this previous week. The Russell 2000 might not be back to its peak but crossed its previous week’s target, indicating an overall healthy sign for the market.
The focus of the investors will be more intended towards the matter of trade in the upcoming week, and that will ultimately decide the rally at the end of the year.
A preliminary trade agreement has been promised by President Donald Trump with China but no further action has been taken as the deadline for brand new tariffs gets closer. The legislation signed by Trump this Wednesday in support of the Hong Kong dissenters captured negative feedback from Beijing. As a result, it ended up adding more unpredictability to trade talks.
The economy’s health has been a major factor for the markets, along with some key stats, with the ISM constructing report. 2019 has turned out to be one of the best years for the stock market. December is often considered as the best month for the stock market, with an increase of 1.6 percent in S&P. It has also got the highest prevalence of advances which is almost 76% this time. It is also considered as a minimal volatile month with few bumps here and there.
A low in mid-December is usually observed in the market, resulting in a favorable buying opportunity through January-end. A big correction or pullback isn’t needed as the decline wouldn’t be more than 5%.
Due to the keen sell-off, the previous December 2019 was all set to conquer. The initial two months play a major role as S&P500 gets a total return of almost 24% in January and February. The entire year’s market performance also shapes a positive outcome in the year-end. If the stocks are about 20% or more by Thanksgiving, the S&P500 generally terminates the year on the higher end, with an approximate gain of 1.8% in between Black Friday and New Year’s Eve.