Can US equities continue to hit new highs in 2020? This is one of the questions that many small and medium investors have been asking for the new year. The responses from the different financial analysts are not homogeneous and different scenarios arise compared to the first stock market in the world. With reasons that collide with each other without the stock market users who expect to enter this financial market in the coming months being able to have a concrete answer.
There are not a few analysts who expect that the US stock market will touched ceiling or this scenario is very close. While others are of the opinion that this is a clearly uptrend that will last at least a few more years. In any case, there is one thing fixed for investors and it is now a bit late for them to enter the positions of this important financial market. Having missed the most bullish sections of this rise. Where they have been able to make profitable operations with profits higher than 0%, something that had not happened for many years.
Another aspect to consider at this time is the clear divergence that shows the equities of the USA with that of the old continent. Because while in the first one it is bullish in all the periods of permanence in the European one, it moves under a lateral trend for many months and that prevents movements from being made so that large capital gains can be obtained. Having to limit itself to movements of low distance and with a profitability that is not expected by a good part of small and medium investors.
US Stock Exchange: Where Can You Go?
The truth at this time is that the American stock market does not find restraints to its tremendous rise. With a buying pressure that has overwhelmed the seller with an intensity rarely seen in equity markets and that has led to many positions being opened in recent years. To the point that there is already very little resistance ahead in what may be the last upward momentum of the first financial market in the world. Despite the latest tariffs that the United States has imposed on Brazil, Argentina and France and that has generated a strong correction in the main stock indexes around the world.
On the other hand, it should also be noted that at any time this trend may end and in this sense it will be necessary to be very attentive to the first signals that these equity markets offer. Because we insist that corrections can be executed with great intensity and of course more than on other occasions due to the special characteristics that US equities present at this precise moment. And that happens to be one of the most bullish internationally. Where investors have been able to make their invested capital profitable by almost 100%. In other words, a very favorable period for the personal interests of stock market users.
Until Trump says
One of the hypotheses that are handled in the US financial markets is that the stock market will be bullish at least until the presidential elections are held in this country and where Donald Trump will opt for his second term. In fact, it is one of his greatest achievements at the head of the White House since since he became expensive, the American stock market has not stopped rising until now. This is certainly one of your greatest achievements in the presidency and you don't want a last-minute downturn in the stock market to hurt your reelection. From this point of view, there are not a few financial analysts who are not afraid of a depreciation of share prices in this electoral period.
The American president will do everything possible so that the status quo of the equity market continues as it is now. Without ruling out that we can return to record highs in the US stock indices. Of course, they would no longer be any surprise for small and medium investors and it would be the last opportunity to take positions in these financial assets in order to make profitable savings and be able to obtain benefits that can be 10% or 20% depending on the increases that can occur from now on. In what can be configured as the end of an upward cycle that has not had another equal period in other historical times.
Objectives for the 2020
In any case, one of the goals for small and medium investors for this period is to try to accumulate profits before the presidential elections in the United States take place. Therefore, operations must be executed very quickly in the first part of this year, since in the second, volatility can be the common denominator in the prices of their securities. Perhaps there are no more opportunities to generate these capital gains in the American stock market. If not, on the contrary, we can go from a clearly uptrend to a bearish one in a very short space of time. Therefore, be very careful with long positions from now on.
Not surprisingly, the risks in operations are increasing as a result of prices reaching higher and higher quotation levels. In this sense, it cannot be forgotten that altitude sickness is one of the main enemies of these financial markets. To the point that it could occur that investors who take positions in this financial market can get hooked on securities. That is, very far from the prices of purchases and therefore with problems to make profitable movements in the stock market.
American or European Stock Exchange
From this approach, it is very normal for investors to hesitate between investing in European equities or, on the contrary, to continue in the American one. It is true that the first one may be cheaper at the moment, but the conditions of the technical analysis are not so favorable for the interests of the users. Although on the other hand, the risks are lower as it has not developed such sharp increases as in the US. From this point of view, there is no doubt that there may be a transfer in the securities portfolio at this time and in the coming months. As investors are starting to do for a few months.
However, you cannot forget about the option of the markets known as alternative and which may be the ones that offer the best returns. Not in all markets, but only in the most bullish ones that are currently located in China and India. Although the corrections in prices there is no doubt that they will be more intense from now on, but that they can be used to buy shares with a more competitive price. But in the end, a broader revaluation potential will be achieved, at least in the short and medium term.
Andbank Spain has an impact on this aspect in which it is “accepted to recognize that the rally It has been due to expansion of multiples (sub-optimal situation), but although the S&P may be expensive in relation to the cashIt seems clear that it is cheap in relation to bonds; that offer an IRR of 1.75%, while equity offers an IRR of 5.26%, measured by the inverse of the PER.
Like everything, I just hope I have answered the question in a satisfactory way ”. Opting that the equity markets in the US will continue to trend upward in the next year.
Less operations on the national stock market
Within this international context, it should be noted that Spanish equities will say goodbye to the year with a certain slowdown in their operations, according to data provided by Bolsas y Mercados de España (BME). Where it is shown that the movements in the stock market reached a market share in the contracting of Spanish securities of 77,09% in November. The average range was 4,88 basis points in the first price level (17,7% better than the next trading venue) and 6,61 basis points, with a depth of 25.000 euros in the order book (43,9 , XNUMX% better), according to the independent LiquidMetrix report.
In any case, these figures include the trading carried out in the trading venues, both in the transparent order book (LIT), including auctions, and non-transparent trading (dark) made out of the book. While for its part, trading in fixed income in this period amounted to 24.965 million euros in November. This figure represents an increase of 0,9% compared to the volume registered the previous month. The total accumulated contracting in the year reached 319.340 million euros, which implies a growth of 67% in relation to the first eleven months of 2018.