Many of the major US equity indices hit new all-time highs again yesterday, pretty standard at this point in 2020. After just 11 trading days in the new year, the S&P 500has already hit five all-time highs and yesterday moved past the 3,300 level for the first time, which has the index once again flirting with overbought status from a technical perspective. Small caps finally joined the party yesterday. The Russell 2000 has underperformed the other major indices by a significant margin over the past year, the Nasdaq 100 by over 50% and the S&P 500 by over 35%, but yesterday reached a new 52-week high, but still not a new all-time high.
After 2019’s impressive run, most analysts were in a more conservative mood when it came to 2020 forecasts. Edward Yardeni, the most bullish of Barron’s 2020 outlook panel, targeted 3,500 for year-end. That’s just 5% upside over the next 11.5 months after yesterday’s close. We continue to see the current earnings season, which will heat up considerably over the next few weeks, and the aggregated guidance to be had for the current quarter as one of the key determinants of the stock market’s next move. The rash of 2020 economic outlooks and the potential implications for monetary policy in the coming year at the annual World Economic Forum in Davos, Switzerland shared next week are likely stock market shapers as well.
- AT&T (T) and Microsoft (MSFT) are constituents in Tematica Research’s Thematic Dividend All-Stars Index.
- Beyond Meat (BYND) is a constituent in Tematica Research’s Cleaner Living Index.