US Economic Expansion To Last “For Many Years” And 2020 Will Be Good For Stocks, Leading Economist Says

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The year-end rally pushed the three major US benchmarks to new records. With only two trading days remaining in the year, US stocks retreated from those records on Monday. As investors look to 2020, the key questions are whether stocks will continue to rally and the risk of a recession.

In our call of the day, Torsten Slok, chief economist at Deutsche Bank Securities, said the decade-long economic expansion could continue for “many years,” putting forward a bullish argument for markets in 2020.

He said the expansion had been characterized by an “extreme degree of caution” among consumers and businesses since 2008-09, with discretionary spending still below historical averages.

Slok said, “The unwillingness to spend on consumer durables and business investment is also the reason this expansion has been so weak.

“And this is also the reason why this expansion could continue for many years to come; we are simply less vulnerable to shocks in 2020 because there are few imbalances in the economy. “

Table

The Nasdaq Composite COMP,
+ 0.47%
reached 9,000 last week for the first time before dipping slightly on Friday, ending its 11-day winning streak. Howard Lindzon, co-founder of StockTwits, has been calling the Nasdaq to hit 10,000 for several years and this chart from his blog shows the index’s trajectory since 2000.

Lindzon said the Nasdaq survived impeachment, as well as a stalled Amazon AMZN,
+1.27%,
Netflix NFLX,
+ 0.68%
and Facebook FB,
+ 0.20%
in recent years, adding that “the trend is my friend” – expecting it to hit the milestone and maybe beyond.

The market

After the Dow Jones Industrial Average DJIA,
+ 0.30%
and the S&P 500 SPX,
+ 0.41%
hit new records on Friday, both indices fell 0.5% early in Monday as the year-end rally came to a halt. The Nasdaq Composite COMP,
+ 0.47%
was down 0.8%, falling back below 9,000. Asian stocks were mixed on the last full trading day of the year, while European stocks fell 0.5% early in the session. Oil prices edged up following the US airstrikes in Iraq and Syria, while gold edged down but held steady near three-month highs.

The buzz

Tesla TSLA,
+ 0.28%
made its first deliveries of cars built in China on Monday, marking a new milestone for the electric car company which saw its inventory hit record highs last week. The stock was up 0.5% in pre-market.

A Federal Reserve study found that President Donald Trump’s strategy of using import tariffs to protect and stimulate American manufacturers backfired and resulted in job losses and higher prices.

The United States carried out military strikes in Iraq and Syria targeting a militia accused of a rocket attack that killed a U.S. contractor, a Defense Department spokesperson said on Sunday.

Salesforce CRM,
+1.29%
founder Marc Benoiff hit Facebook FB,
+ 0.20%
Sunday, calling for regulation. The Salesforce co-CEO said the social media giant “is the new cigarette for our society” demanding it be regulated or split.

The outgoing Governor of the Bank of England, Mark Carney, issued a climate change warning, urging companies to change their policies on investing in fossil fuels.

Random readings

An ordering error at the chip shop and an expired cookie package are among the reasons for nuisance emergency calls taken by the British police this year

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