Market Review – January 2020

Happy New Year! In this month’s Market Review, our Chief Options Specialist, Jason Ayres, reflects on the January market and provides his predictions for what’s to come in 2020.

Here’s our overview:

• There was little holding stocks back in December as investor optimism pushed stocks higher
• Much of this optimism is supported by the following:
  • Accommodative monetary policy
  • Low interest rates
  • A strong labor market
  • A stabilization and possible increase in global growth projection
• These are all considered signs of modest growth for the global markets
• So, what are the risks?
  • The potential for negative headlines and markets is at an all-time high
  • U.S./China trade relations have made progress, but anything could happen
  • Strain on U.S./Iran relations, which might cause companies to rethink their capital expenditure plans, slowing global growth expectations down
• U.S. and Canadian stock markets began 2020 at an all-time high, meaning stock prices are expensive
• A pull back in the markets is a growing probability, but upward earnings revisions may suggest further upside for stocks
• The possibility of a Democratic White House will likely cool markets down, while Trump may try to keep the heat on the Middle East