The causes of a booming stockmarket are unlikely to last through 2020 

THE CHRISTMAS of 2018 was a dismal one for American stockmarket investors. Meagre gains eked out through a volatile year were reversed at its end, on fears of slowing global growth and all-out trade war between America and China. The S&P index of large companies tumbled by 15% between November 30th and December 24th that year. Many thought a recession was imminent.

The fears proved overblown. The S&P 500 rose by 28.9% during 2019, close to the 2013 record increase and well above the average annual gain for the past decade (see chart). December is often good for markets—a phenomenon traders call the “Santa rally”. This one was particularly strong, with the index rising by 2.9%. Markets beyond America also did well. The FTSE All-World, a global index, rose by 24% in dollar terms, its best showing since 2009. 

Share prices often rise when expectations of future profits do. But earnings have stagnated recently, so that does little to explain this...

via The Economist: Finance and economics Business Feeds

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