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Stocks to Continue their Record Gains this Christmas

Zacks Equity Research

Stocks are expected to extend their record gains this Christmas Eve 2019, in a half-day session ahead of tomorrow’s market closed in observance of Christmas Day. Futures are up yet again on positive sentiment, as well as a lack of economic or company news events that might temper outlooks.

As it happens, and now at new all-time record highs in the three major U.S. stock markets, we are exactly one year from the nadir of near-term market performance: the disaster of the 653-point drop on the Dow in last year’s half-day session. Another interest rate increase from the Fed joined accumulating consternation about the escalating trade war with China to create a real Christmas “wall of worry.” That wall has by now not only been scaled, it’s largely disappeared.

We not only prepare to say goodbye to calendar year 2019, but the era of the “20-Teens” themselves. We’ve seen lots of changes in technology, especially in how it affects our entertainment choices — from 4G technology allowing us to watch movies on our phones to streaming and social media explosions that have brought us much closer to the content we enjoy. Apple AAPL, Twitter TWTR, Netflix NFLX and Amazon Prime AMZN have all taken a much larger piece of the economic pie over the past 10 years.

Not all industries have performed so well, of course. While we saw almost 400% gains in the Tech industry since 2010, Energy has been the clear laggard, up just 34% over the same time period. For 2019, this sector has performed even worse, up just 6% — including all dividend yields.

Excess supply mid-decade from Saudi-led OPEC, as well as U.S. fracking operations bringing America to the top of the heap in energy production sent prices plummeting, and they have yet to fully recover.

Compared to where the U.S. saw itself a decade ago — recovering from, but still deep within, the hole of the Great Depression which occurred near the end of the previous decade — it’s hard to have imagined we’d have come this far by now. The S&P 500, up more than 160% since wallowing in the 1200s in 2010, was up another 29% in the past year alone. This was off the big drop from a year ago, but still — who would have dared predict this at the end of 2018?

We hope all of our readers enjoy a Merry Christmas, Happy Hanukkah, Joyous Kwanzaa and all other Season’s Greetings. This column — and our Zacks.com content team overall — will also take Christmas Day off tomorrow, and be back on Thursday. Happy Holidays, everyone!

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