Will The Bull Market Continue Into 2020?

2019 was the best year for U.S. stocks since 2013, but can the market continue to power higher throughout 2020?

There are headwinds for the coming year. The Federal Reserve has said they won’t be cutting rates further in 2020. Consumer spending could slow as the jolt from tax cuts has played out. And while there’s a phase one trade deal, the trade war between the U.S. and China is far from over.

There are still plenty of reasons to think stocks can rise in 2020 though. The U.S. labor market and economy remains healthy. The U.S. and China continue working towards a trade deal, with the phase one portion expected to be signed on January 15. The Brexit looks as if it might finally have a resolution.

So, investors are expecting more gains for 2020, but not at the same heady pace as in 2019. Many major banks are calling for stock market gains to slow significantly in 2020, and historically the year after gains such as we’ve seen in 2019 are typically more modest.

One sector investors might want to keep an eye on is the manufacturing sector, which is expected to benefit from the ongoing progress in the U.S.-China trade war. Businesses held back on spending during the uncertainty of 2019, but that spending should rebound in 2020.

There are some risks. High valuations for U.S. equities could have investors looking elsewhere, putting an end to the decade long bull-run. And the 2020 U.S. Presidential elections in the U.S. also have the potential to end the bull-run.