Profit from the Pros
What A Year! Time To Start Planning For 2019
Stocks closed narrowly mixed on Friday, but finished sharply higher for the week.
After the Christmas Eve plunge left the S&P down -19.78% from its all-time high close, and teetering on the brink of a technical bear market, stocks roared back in an historic rebound with the S&P rallying 5.73%, the Dow up 5.83%, and the Nasdaq up 6.32%.
Stocks were and still are grossly oversold given the robust economy. And with so many stocks trading at such tremendous discounts, it's no wonder we're seeing large money managers and professionals and pension funds coming in and buying.
A growing sense of optimism over the U.S.-China trade talks continues to underpin this rebound. Especially after word that the U.S. and China will meet face-to-face for more trade talks in early January while continuing their phone dialogue until then.
Separately, the partial government shutdown has seemed to have had little impact on the market. Granted, the political dysfunction is not encouraging. And the shutdown could last a long time. But so far, the market has taken it in stride. Plus, it's not like the extreme partisanship we're seeing is anything new. It's been like this for the last 2 years. Nonetheless, when a compromise is finally made, it will more than likely be a positive for the market.
The big catalyst though will be when the U.S. and China finally come to a real and tangible agreement. That has been the biggest weight on stocks. And once that negative is removed, stocks should soar! In the meantime, the more positive tone from both sides has been helping quite a bit.
Today is the last trading day of 2018.
It's been a wild wide.
But even though the market is down for the year, there are thousands of stocks beating the market. Over 1,700 that are up for the year. More than 850 up 20% or more. And over 180 stocks up 100% or more YTD.
As you reflect on 2018, be sure to pat yourself on the back for your successes, be honest with yourself for your failures, and start planning for what you'd like to accomplish in 2019.
Now is the time to start looking at all of the great bargains out there. There are amazing stocks selling at prices you could've only wished for a few short months ago. And some trading at prices not seen in years.
If you wished you would've traded 2018 differently, now is your chance to do so.
The markets will be closed tomorrow for New Year's Day. But regular trading resumes on Wednesday.
Happy New Year!
See you next year,
Kevin Matras
Executive Vice President, Zacks Investment Research
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