As the year draws to a close, we should consider what is likely to happen next year on world markets. Undoubtedly, world markets will continue to follow what happens on Wall Street so we will confine our discussion to this market.
Once the traditional fear of October month was behind us, the S&P500 began making a series of new record highs. This is not unusual. Over the festive season it is quite normal for there to be a “relief rally”. If the market did not crash in October, it is extremely unlikely to crash over the year end. The thoughts of investors turn to the new year and the promise which it holds. Consider the chart:
S&P500 Index June to December 2019 – Chart by ShareFriend Pro
You will notice that the current upward trend is accelerated. From breaking above the previous record high of 3025 (made on 26-7-19) this index has risen by 166 points or 5,4% in less than 2 months. The 5,4% to reach that level of 3025 took almost 7 months to achieve. This acceleration indicates a growing confidence in the future of the US economy. However, as a word of caution, nothing in the markets moves in a straight line – so you should expect some sort of correction in the fairly near future. Read More