Profit Growth Key for 2020 Stocks
Submitted by Frye Financial Center on December 23rd, 2019
Now that we have some clarity on U.S.-China trade and Brexit, in 2020 we expect drivers of stock market performance to shift more toward investing fundamentals. We also expect stocks to appreciate in line with earnings. "In 2020, we believe a pickup in earnings growth will be the biggest key to potentially pushing stocks beyond our S&P 500 Index fair value range," says John Lynch, Chief Investment Strategist, LPL Financial.
Clarity from the phase-one trade deal with China and United Kingdom election results could help shift stock market performance drivers more toward investing fundamentals in 2020. We expect stocks to appreciate in line with earnings growth next year, which justifies benchmark-like equity allocations in our view.