Stock Market Sets New Record High: What’s Driving It?

The S&P 500 Index closed at a record high on Monday October 28. With all the noise this year about trade wars, slowing growth, and impeachment it’s a surprise to see the market power through these worries. 

What’s driving the record high market? 

First, third quarter 2019 earnings for large U.S. companies have been good. According to FactSet (below) about 3 out of 4 companies that have reported so far have beaten analyst earnings expectations. The only real weakness has been in Energy where oil prices have been weak.

Secondly, the Federal Reserve delivered its third straight interest rate cut this week. As we’ve mentioned before  the Fed has done a 180-degree turn since last year, when it was hiking interest rates. This has boosted investor confidence that the recent economic slowdown won’t turn into a full-blown recession.

It’s been a remarkable 12 months

The stock market has moved around a lot in the last year. This time last year, the market was in the midst of a correction which took the stock market down almost 20% in three months. Since the bottom in late December, the market has risen almost 30%!

It goes to show how important it is to stay invested. No one can time markets. But we can always take what the market gives us and rebalance our portfolios to take advantage of these moves. 

Wondering how this affects your future finances? Schedule a call with Financial Design Studio to discuss your portfolio today.