It’s the time of year for reflection, both on what has transpired—very good in markets if perhaps bumpy—and on what might be in 2020. For investors, it’s particularly important. Afterall, how does one follow up a stock market that has risen a white hot 25% in 2019. Can you top this?

The way I read the economic data is that there are at least two keys to stock market action next year, and both lead to the potential revival of animal spirits. Let’s face it, we haven’t seen that kind of pro-market, enthusiastic sentiment in a long time, thanks to how painful the 2008-2009 bear market was. This bull is still not accepted by many investors but that might change soon and many investors remain gun shy.

In my view, 2018 was a proper bear market—down 20% in December—and a reset of economic and fundamental expectations. So 2020 looks to me as Year 2 of a new bull market, analogous to 2010 after 2009’s sharp rise from lows. 2010 was ultimately a strong year but saw a weak first half.

In summary, investors should not fight the central banks of the world, which are generally in an accommodative or non-hiking rate mode, a positive for stocks. (For more see page 6.) Second, the Standard & Poor’s 500 index aggregate earnings per share (EPS) will rise about 10% t...

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