WASHINGTON, D.C. – The US stocks hit new record highs this trading week amid the increase in optimism in Wall Street, putting the fear for a possible recession in the back burner.
Early in the week, the three main indexes in the US hit record highs. Although they’ve gone into a rocky patch in the middle of the week, retreating slightly, the stocks go up again by Friday. At the end of the trading week, the US stock market has effectively reached its highest level in history, which is something that the White House was happy about.
According to a statement made by the head of Yardeni Research, Ed Yardeni, he said that it is unlikely that the US economy, nor the global economy, is going to face a recession by the end of 2020. He also continued saying that the market is expecting that Trump would go for another term as US president, noting that impeachment issues take so much of the time of the president, which puts the trade talks in the back burner as of now.
On the other hand, the bullish sentiments for the US market for next year is not a sure win, especially when it comes to trade negotiations, which has been one of the massive factors that weighed down on the market recently.
Overall, 2019 has been a good year for the US market, according to analysts. The Dow Jones Industrial Average has already noted a 20% increase this year. It is modestly higher by about 4% from what was recorded in October last year, suggesting that there might still be its hesitancy in the market player’s sentiments.
According to the senior analyst at S&P Dow Jones Indices, Howard Silverblatt, this week was a nervous market, with investors one finger away from the sell button.
On the other hand, the recent weeks have been suggesting how momentum can quickly shift, noting that Goldman Sachs has previously sent its clients a note on November 3 that it is unlikely that the president will impose new tariffs on Chinese goods. However, it later sent another note on November 9, stating that the risks of more taxes have risen again.
From a statement by President Trump, he was crediting himself for the new record highs in the market, which according to him, reached through the roof since the Election day. However, most market analysts are praising the Fed, not the president, for the rebound in the US stocks this year.
Although, according to Alex Musatov and Pavel Kapinos from the Dallas Fed, the S&P 500 index might have had an over 12% increase for the past two years if there wasn’t a lot of uncertainty in the market.