news report banner

news report cell

4th QUARTER NEWS

Forecasting the stock market is sometimes like trying to predict at the start of football season which team will clinch the Super Bowl. Few sports gurus get it right. Similarly, in 2019, very few Wall Street analysts foresaw the spectacular performance of the stock market. Forecasting the stock market is sometimes like trying to predict at the start of football season which team will clinch the Super Bowl. Few sports gurus get it right. Similarly, in 2019, very few Wall Street analysts foresaw the spectacular performance of the stock market. 

What happened? In the words of one market professional: “When people look back at 2019, they’ll say the Fed did this!”  Indeed, the Federal Reserve spun heads when it switched course, from raising interest rates to cutting them and pumping fresh money into financial markets. Investors were also comforted by the easing of trade tensions and reduced prospect of imminent recession. 

So what happens next? Financial history provides guidance. Spectacular stock market years like 2019 are usually followed by a year of more modest equity gains – but not a retreat. That is the current consensus viewpoint on Wall Street and we share it at Hudson Advisors. The logic is pretty simple. The economy still has enough momentum to keep pushing the market higher. But that growth will be constrained because stock prices are now quite rich.Our priority at Hudson Advisors will be to talk with clients about their portfolios. We likely will advise many clients to re-balance because the 2019 gains have driven their equity holdings above optimal asset allocation. We may need to focus on non-equity investments. As always, however, we will look at selective stock buying opportunities.

The Economy: The current expansion in the U.S. economy began in June 2009 and is now the longest in our national history. But, despite its duration, this expansion has been somewhat anemic and paradoxical. Total growth in GDP over the period is only about 25%.  Unemployment is now down to 3.6% but job growth is lower than in previous expansions. Workers have only seen increase in real wages in the last two years. Inflation is subdued. The Economy: The current expansion in the U.S. economy began in June 2009 and is now the longest in our national history. But, despite its duration, this expansion has been somewhat anemic and paradoxical. Total growth in GDP over the period is only about 25%.  Unemployment is now down to 3.6% but job growth is lower than in previous expansions. Workers have only seen increase in real wages in the last two years. Inflation is subdued. This pattern is expected to continue in 2020. Annual growth in GDP is projected to be around 2% -- similar to 2019 and other recent years. It is a mixed story. The manufacturing sector is struggling. Business investment is weak and restrained. However, the economy is being driven by a confident consumer sector buoyed by the availability of jobs and measurable wage growth.  The international economy also looks better than a year ago.At Hudson Advisors we still believe in the idea of the “business cycle.”  The U.S. economy will face recession again at some point. But 2020 does not appear to be that time. Like much of our industry, we are reassured by the Federal Reserve statements that interest rates are “appropriate” for the foreseeable future. This policy will help achieve a stable economy.


Copyright 2017 • All Rights Reserved for Hudson Advisor Services, Inc. by Oasis Web Development
Corporate Office: 237 Main Street Suite 600, Buffalo NY 14203 • (local) 716-803-6587 • (toll-free) 877-504-1964 • E-mail Us