First Word

2020 thoughts --> EPS +10% + P/E flat (even upside) = S&P 500 > 3,450 and maybe 3,500-3,600

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2019 is one of the strongest years for markets in more than 25 years and it is logical for one to think stocks will stall in 2020 (take breather) but unless P/E contracts, we think equities could do 10%-plus or better in 2020.

2019 was all P/E.The S&P 500 is on track to gain ~30% in 2019, all gains from P/E expansion.
  EPS  $193 --> $178
  P/E    13X -->  18X

2020 EPS +10% + PE upside: S&P 500 >3,450 and maybe 3,500-3,600
For 2020, the recovery in PMIs + Inventory build + Fiscal stimulus (Japan + possibly EU + White House) + easing financial conditions = EPS upside.
  EPS  >+10% in 2020
  P/E    flat to up (Fed ease + animal spirits)

Thus, we see stocks gaining 10% or more in 2020.  

We see 4 drivers to EPS upside (below) and these should allow EPS to grow >10% in 2020
P/E could also expand as "animal spirits" recover and Fed maintains dovish stance.  Combined, this is >10% total return.

The video in this report is only accessible to members
POINT: 45% OF EPS GROWTH COMING FROM 4 SECTORS -- TECH, INDUSTRIALS, ENERGY & MATERIALSAbout half of the cyclical recovery in EPS is coming from 4 sectors (Tech, Industrials, Energy...

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