Running of the Bulls – January 15, 2020

Q4 2019’s strong performance has spilled into 2020.

Drivers of bullish sentiment include—

• Recession fears have subsided, and the economy is expanding.
• The yield curve is no longer inverted.
• The Fed is in no hurry to raise interest rates this year, and it has been buying Treasury bonds, i.e., QE-lite.
• There are signs that global growth, which slowed last year, is stabilizing.
• A ‘skinny’ trade deal with China will be signed on January 15.
• Corporate stock buybacks have moderated but remain at high levels.

What might derail bullish sentiment?

• Global hotspots that flare-up might create short-term headwinds.

Other concerns include—

• The global economy weakens.
• Trade tensions rise with Europe or other nations.
• The U.S. consumer drops the economic ball, and the U.S. economy slows too quickly.
• An unexpected acceleration in inflation puts the Fed on alert for rate hikes.
• Earnings growth fails to accelerate in 2020.

Investor’s corner

Successful investors have written goals, and develop and maintain a plan to accomplish their goals. They keep an eye on the long term and avoid reacting emotionally when the inevitable bout of volatility arises.

Created 2020-01-15 15:12:59