With Nothing To Stand In Its Way, The Market Turns To 2020


By: Spencer Israel

On Dec. 16, investors were given an early Christmas present, as the S&P futures broke 3200 for the very first time.

It was the culmination of a stunning rally that’s taken place in the last three months. As of this writing, the S&P futures have closed higher in 10 of the last 11 weeks, during which time they’ve rallied over 11%.

As we head towards Christmas—typically a positive time of the year for the market—it’s hard to imagine sentiment getting too much more positive than it already is. Let’s count the reasons why investors are feeling good:

1) The U.S. and China have agreed to terms on “Phase 1” of a trade deal, ending a volatile period of negotiations between the two sides and providing a signal that a long-term truce is on the horizon

2) Boris Johnson’s victorious snap election means a strong likelihood of a Brexit in early 2020, ending three years of “Will they, won’t they?” drama

3) The market remains convinced that, despite being impeached by the House of Representatives, President Trump will not be removed from office

4) Despite concerns about an economic slowdown and inverted yield curve, leading economic indicators like consumer sentiment, spending, and employment all remain strong

So with just a few days to go in 2019, here’s where things stand across the major futures markets:*

  • Nasdaq 100 E-Mini futures: up 35% year-to-date
  • S&P E-Mini futures: up 27%
  • WTI Light Sweet Crude Oil futures: up 25%
  • Brent Crude Oil futures: up 20%
  • Gold futures: up 12%
  • S. Dollar Index futures: up 2%
  • 10-Year Treasury Note futures: up 0.43%

Unless you were investing in grains (impacted by the trade war), currencies (hurt by a strong U.S. dollar), natural gas, or bitcoin, it was hard to lose money in the futures markets in 2019.

Of course, there’s no guarantee things will stay the same in 2020. In fact, there’s a good chance they won’t. But for now, we can sit back and relish what year it was—they don’t come around very often.

*All performance data as of Dec. 19, 2019

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