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Upside "dry powder" for S&P 500 as evidence mounting 2020 Economy › 2019 Economy...

After spending much of the week rangebound, equity markets ended on a strong this week pushing the S&P 500 to a new all-time high (3,120) and on track to exceed our recently raised target of 3,185 (+65).  As markets push to 'new highs,' it is a natural inclination to want to 'fade' this move.  But we are in the final 8 weeks of the calendar year and as such, different dynamics are at play: we pointed out a few weeks ago, markets that show strength thru Nov 1 YTD, the rally into YE tends to be stronger.  History says 3,216.  Another +100 points from here and very tradeable.

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More importantly...The cadence of incoming economic data has improved. It seems that 3 regions are set to show renewed cyclical strength in 2020--> US, China and Japan.  The rationale from Goldman Sachs and JPMorgan economists are listed below. 

- US sees continued strong consumer + housing = capex strength in 2020
- Japan set to see PM Abe push fiscal stimulus 2020 (=better GDP)
- China is bottoming

The above 3 economies are > 50% of global GDP and as we have said multiple times, the US and China are the only 2 real drivers of the global economy and both look stronger in 2020.

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If industrial cycle is bottoming, 2020 S&P 500...

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