Strong Year in the Markets

Strong Year in the Markets—12/23/2019

As the year is coming to a close, the market has been very strong.  As I type this, the price change on the S&P 500 is a positive 28.5% for 2019.  All this has occurred with political turmoil swirling within the United States, a trade war raging between China and the U.S., and geo-political uncertainty popping up all over the world.

The question that many may ask is, why?  Why has the market rallied so hard to the upside with all these uncertainties in the air?

I think the answer to that question is; earnings.

At the end of 2016, S&P 500 earnings’ were $94.55.  Projected 2019 S&P 500 earnings are $140.55.  Running the numbers and those data points shows a 48.5% cumulative growth rate in earnings over that time frame.

There is no question; that will make the market move!


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