Latest posts by Michael Vodicka (see all)
- S&P 500 Just Below the 52-Week High – Rebound or Head Fake? - September 8, 2019
- Trade War, Recession, Election – Panic or Buy? - August 25, 2019
- Gold up 16% in 2019 – I See More Gains Ahead - August 12, 2019
The US stock market is showing resilience in the face of adversity. Despite the threat of recession and the US, China trade battle, the S&P 500 jumped 2.2% this week. That push higher has US stocks trading just below the 52-week and all-time high.
Take a look at the action below.
This is good news for the stock market. The S&P 500 is up 19% in 2019, trading just below the 52-week high and it looks like the index is ready to break the old high.
This move higher might come as a surprise. The stock market has real challenges ahead and the mainstream media loves to fearmonger about the end of the world with every tick in the market.
Here’s my take on why we are seeing some strength from US stocks.
Wall Street is Getting Comfortable with the US and China Trade Battle
I think stocks are gaining ground because Wall Street is getting a lot more comfortable with the US, China trade battle.
When word first hit the wire that this mega brawl was going down – Wall Street was terrified. A lot of analysts said the global economy was going to grind to a halt.
Some of those fears were legit – but now we’re 9 months into this trade battle, we’ve seen multiple escalations and guess what? The global and US economies are still growing nicely – 2019 looks like another solid year of global economic growth.
This US, China trade battle hasn’t been the global crusher some had predicted – and that has been good for US stocks.
Here’s a great article on the US and China trade deal.
What Should we Expect Moving Forward?
Despite the progress on China and the rally in stocks, I am still expecting to see plenty of volatility in the next 12 months.
- The threat of recessions looms.
- The 2020 US presidential election is going to be a wild ride.
I am not expecting the stock market to crash at all. But I do expect to see short-term volatility as the market works through these speed bumps.
Get More Aggressive with your Portfolio: sell bonds and add stocks to your portfolio. Look to buy stocks on dips.
Get More Defensive with your Portfolio: sell stocks and add bonds to portfolio. Look to sell stocks on new highs.