The Dow closed out 2019 with a 76-point gain at 28,538 on light trading volume. The news out of Washington DC is that the phase one China trade agreement will be signed on Jan 15th.
For the year US markets posted the best returns since 2013. The Dow finished up 22% while the S&P 500 Index gained 28.5%. Tech stocks led the way and banks had a good year while healthcare, energy, pipelines and materials all lagged. Within the energy space however renewable energy posted solid returns as growth, coupled with projections for continued rising demand drove investors into the space. The renewable energy segment includes hydro, pumped hydro, wind, solar, battery and geothermal.
It seems the consensus among gurus is that the S&P 500 Index will finish 2020 at 3,400 which is about 5% higher than today’s level. The range being 3,000 on the low end and 3,600 on the high end. Bond guru Jeffery “Gunny” Gundlach at Double Line Capital thinks we are headed for a recession sometime in 2020 and that investors need to get defensive. He thinks investors should move money out of US stocks into overseas markets where relative valuations are lower. While Gunny does not give specific targets for the Dow, he feels that rising US gubment debt levels and slowing manufacturing will eventually affect consumer confidence, spark a consumer spending pullback and thus a recession.
Markets will be closed tomorrow and back at it on Thursday.