· U.S. stocks soared to fresh record highs Friday, with the S&P 500 rising 0.5% to 3,221.23. The Nasdaq Composite rose 0.4% to 8,924.96, notching an eight-day winning streak. The Dow Jones Industrial Average climbed 78.13 points, or 0.3% to 28,455.09.
The benchmark S&P 500 is up nearly 28% for the year, which if the market closed this week for the year, would mark the second-best annual performance for the index since 1997.
However, investors who are hoping the rally will continue charging ahead through next year may be disappointed. The S&P 500 has returned an average of 6.6% in the year following a rally of 20% or more since 1928, slightly below the 7.6% return in all years, according to research from Bespoke Investment Group.
“There are not a lot of investors in the bond markets losing their shirts because the economy is running ahead of expectations,” she said.
The November presidential and congressional elections will likely weigh on politically sensitive sectors like healthcare as 2020 progresses, Sonders said, adding another market headwind that could prevent another string of outsized gains like the late 1990s.
“You had a bunch of strong years back then because we were in the midst of a tech bubble and there was no cap on valuations. Now we have real legitimate companies but there’s not the same sign of excess valuation,” she said.
Few on Wall Street expect a bear market in 2020. There are few signs of a recession looming in the year ahead, while the market has seemed unfazed by issues such as President Donald Trump’s impeachment or ongoing trade tensions, said Jonathan Golub, chief U.S. equity strategist at Credit Suisse Securities.
· Markets in Asia were mixed in early trade amid greater trade optimism between the U.S. and China.
Japan’s Nikkei 225 rose 0.18%, and the Topix index was flat. Australia’s S&P/ASX 200 fell 0.39%.
South Korea’s Kospi edged up 0.21%.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat.
Over in Singapore, the country’s consumer inflation data is set to be released on Monday.
Meanwhile, China’s state-backed semiconductor fund over the weekend announced plans to reduce holdings in some tech firms, according to a Reuters report. The state fund planned to cut its stakes in Gigadevice Semiconductor, chipmaker Shenzhen Goodix Technology and Hunan Goke Microelectronics by about one percentage point each, according to those companies’ statements.
That came as all three firms had huge stock gains this year, the report said.
Trade optimism boosted sentiment as U.S. President Donald Trump on Friday said he had “a very good talk” with China’s leader Xi Jinping about the so-called phase one trade deal they struck in mid-December. That indicated more progress has been made after they reached the initial agreement.
Reference: CNBC, Reuters
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