Expecting Big Gains In 2019, Let The New Trading Year Begin!

Profit from the Pros Expecting Big Gains In 2019, Let The New Trading Year Begin! Stocks closed solidly higher on Monday, the last day of the year. But stocks suffered their worst annual performance in a decade. Although, that sounds a lot worse than it is, as the S&P was only down -6.24% for the year. (Even less at just -4.38% if you factor in the dividends.) Nonetheless, it was still a disappointing year. 2018 started off with a bang, continuing the big gains we saw in 2017. But then the correction hit. It was a surprise to say the least, especially since we hadn't had a correction for nearly two years prior to that. Stocks then came roaring back, putting in new all-time highs in the process. But then turned around again, as we saw yet another correction. At the moment, it looks like the worst might be over. And stocks have already bounced well off their lows, with the S&P rallying over 6.8% since then. Trade tensions with China was and is the main catalyst weighing on stocks. When tariffs were first talked about earlier in the year, that sank stocks. But as the administration held productive trade talks with the EU, South Korea, and Japan, not to mention Mexico and Canada (which ultimately led to the new NAFTA deal, now known as the USMCA), stocks quickly rebounded. But as U.S. talks with China deteriorated, and tariffs were levied on each country from the other, stocks retreated. Interest rate worries and political dysfunction figured into the mix as well. But with rates still historically low, and nobody surprised by the partisan bickering nowadays, these events provided limited downside. Doesn't mean they can't exact any more pain in the future. But for now, the market is focused on the U.S.-China trade talks. And rightly so. An agreement between the two largest economies in the world is important. That will be a positive for both the U.S. and China. And that in turn will be a plus for the world economy. And you can see how the markets are hanging on every bit of news regarding a deal. In fact, many attribute Monday's gains to President Trump touting his weekend call with President Xi and the 'big progress being made' towards a comprehensive deal. Of course, that can go the other way too. With an agreement deadline not until February 28th, we're bound to hear some less optimistic tones between now and then, even if it is just negotiating rhetoric. But it shows how high the stakes are for a deal. And why the market will be listening to every word. Fortunately, this is all happening against a backdrop of one of the best economies ever and record employment. Remove this weight of uncertainty with China and the market is likely to explode higher. In the meantime, as you reflect on 2018 and how you fared in the market, 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. As I've said before, 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 in 2019. And I'm expecting big gains from the market in the new year! Let the first trading day of 2019 begin. Best, Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Countdown Begins: Zacks Top 10 Stocks for 2019]( From a universe of more than 4,000 stocks, Director of Research Sheraz Mian is preparing to release the 10 best buy-and-holds for the coming year. His process consistently beats the market. This year, while the S&P 500 descended -8.2% through December 19, Zacks Top 10 Stocks for 2018 actually gained +12.9%. What's more, from 2012 - 2017 while the market boomed +126.3, his Top 10s reached an even more stellar +181.9%. With most Top 10s, you can check them out now, next week or next month. By contrast, these stocks are time-sensitive. Their potential upside is greatest at the time of their release Wednesday, January 2 at 11am ET. [Be First to See Them >>]( Most Popular Articles from Zacks.com [7 Hot Momentum Stocks to Watch in 2019]( Our research shows stocks with a Momentum Score of A, when combined with a Zacks Rank #1 (Strong Buy), offer the best upside potential in the short term. [Read More »]( [5 Stocks That Could Help Russell 2000 Rebound in 2019]( We suggest you to place your bets on these small-cap stocks as they could help the index bounce back in the new year. [Read More »]( [4 Transportation Stocks That Could Beat the Market in 2019]( Factors like strong e-commerce growth and upbeat freight demand should aid transportation stocks in 2019. 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