Nobody has a crystal ball that can predict the future, especially when it comes to the investing world. For instance, at the beginning of 2018, how many people predicted that a trade war would break out, or that the yield curve would invert, prompting fears of a recession?
With that in mind, I'd like to take a shot at some bold (but realistic) projections of my own for 2019. In general, I think 2019 will be a stronger year for the stock market than most experts seem to believe, and here are five reasons why.
1. The trade war will come to an end
Simply put, the trade war with China is bad for everyone. Nobody wants big tariffs, and both sides stand to lose a lot if this continues past the recently extended deadline to make a deal. Plus, President Trump knows the trade war is putting pressure on the stock market, and it's well-known that he considers the market's performance to be a barometer of his success.
So I think the two sides will come to some sort of permanent agreement about trade early in 2019, putting the trade war behind us and causing investors around the world to breathe a collective sigh of relief.
2. The Fed will raise interest rates, and not just once or twice
Despite the recent stock market volatility, the U.S. economy really is quite strong. Unemployment is below 4% and the most recent weekly jobless claims figure was the lowest it's been in nearly 50 years. We're finally starting to see significant wage growth, and inflation is running slightly ahead of the Federal Reserve's 2% target. Plus, all indications point to high consumer confidence as we head into the holidays.
