In 4Q 2019 markets continued to react to the buffeting news flow as an array of headlines besieged investors.
Brexit, the Trump Trade War, energy sector write-offs (Chevron), political attacks in the healthcare sector, Fed policy debate and proposed wealth taxation were among the many worrisome topics.
Meanwhile, US stock markets reached all-time highs, and that strength broadened to include small- and mid-cap stocks. As this is written, the rally broadening seems intact.
Impeachment proceedings are ignored by markets – there doesn’t seem to be any market-moving news flow from the House’s actions. Whether or not that changes in the Senate in January is an open question.
Markets seem to have discounted the USMCA. We are pleased to see it advance. We expect final passage and believe it is good for all three countries. There isn’t much that has changed between old NAFTA and new USMCA. Political forces will exaggerate the benefits. But there are benefits, and they should help the stock markets in all three countries.
We head into 2020, leaving a 2019 that was surprisingly profitable. We don’t expect a repeat in 2020. A high single-digit return for the US stock market is our goal. We also expect more volatility as presidential politics grow yet more heated and chaotic.
In addition to David’s commentary here, it’s that time of year when the rest of the Team at Cumberland Advisors provide their Q4 Reviews.
We may discuss what we favor, cash positions, warning signs, and what we see as opportunities. Read more Q4 Reviews to learn about the thinking behind our positioning of portfolios and how we execute strategies at this link: https://www.cumber.com/2019-q4-reviews/
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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.