Many stock analysts see the continued growth of U.S. equities short-lived, becoming questionable in coming years. It has certainly been an upward climb, but how much longer can we expect exponential growth at this rate?
The S&P 500 had its 6th week of gains. This continual climb in the stocks is a call for celebration, especially with it being the longest run in history for the index. Investors claiming future years are less predictable are ignoring rumors of the closing of a trade deal between China and the U.S.
Even with that deal forthcoming, it does not protect equity strength for years after that. The news of the deal was on the optimistic end of news from Larry Kudlow, White House Economic Advisor.
It’s easy to expect we’ll keep seeing this momentum that has been carrying over for the last couple years. This will naturally slow down, however, if there is no outward momentum pushing the market even further. CEO of Destination Wealth Management Michael Yoshikama digs deeper into this when he stated, “While I believe interest rates are going to remain low, much of the positive benefit has already been played out in the market.”
How Will The International Market Respond
Many equate the U.S.’ stregnth in comparison to other countries This is to say when U.S, equities decrease, the International market could begin gaining. Depending on when those choose to invest in large or small caps is whether their investment view points more internationally or domestically.
Investors are split in two distinct groups when it comes to U.S. vs International equity. There are those who expect the U.S’ returns to tower over international rates. Others who find that not sustainable for more years are looking to capitalize on different Relative weight EFT plays.
If U.S. equity strength begins to slow down, it could become an opportunity for them to outdo U.S. equities and bring in a win to those holding an international over domestic investment views.
Betting on domestic equities shows account of low economic data. If international equities are not performing in yearly reports, there is no reason to assume a drastic change in coming months. With the U.S. moving forward in strength, it is odd that manufacturing is slowed elsewhere in the world.
New Markets Gain Momentum
Positive returns were seen from all over the globe, even if not at the height of the U.S. The U.S. leads the market with 2.28% gains on equity value.
Progress on the U.S.-China trade deal has been fueling the U.S. market for previous quarters. The more progress on the deal, the better the country’s equity becomes. LAst quarter there was a more accessible monetary policy put in place which produced earnings higher than previously thought.