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2019’s stock market gain can serve as a ‘good platform’ for stocks in 2020: strategist

Photo of a window washer, at an elevator.
Photo of a window washer, at an elevator.

The stock market surge so far in 2019 could pave the way for continued gains in 2020, according to one strategist.

“In our view, this year has the potential to serve as a good platform for stateside equity markets to rise further in 2020 so long as there’s a ‘Phase One’ trade deal between the U.S. and China formalized in the not too distant future,” wrote John Stolzfus, chief investment strategist at Oppenheimer Asset Management.

The Dow Jones Industrial Average (^DJI) is up more than 20% so far this year and has reached multiple record highs during the month of November.

While a 20% gain for a major stock index would traditionally be considered an impressive performance, at least by historical standards, Stolzfus is putting 2019’s gain in context.

“2019 is not so much a banner year for equities as a solid ‘do-over’ year for stocks, which have managed to gain back what they lost in last year’s fourth quarter ‘mugging’ and then getting a chance to add some to those regained levels over the course of this year,” he wrote.

The stock market is up several percentage points since the peaks of 2018, which occurred in September, just weeks before the massive stock market slump in the fourth quarter of 2018. Last year, the stock market posted its worst year since 2008, amid fears that the Federal Reserve was raising interest rates too quickly. The Fed hiked four times in 2018, only to reverse course in 2019, by cutting interest rates three times.

Still, 2020 would mark the bull market’s eleventh year. But the lengthy duration of this bull market in and of itself isn’t stopping Stolzfus from feeling bullish.

“With the rising likelihood of a ‘Phase One’ trade deal in our view sometime between now and February 2020 and a potential for ‘comps’ (revenue and earnings comparisons) stateside to improve in the new year, the near 11-year-old bull market may have a solid chance to prove it still has legs to run on,” he added.

Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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