The major stock market indexes have hit an all-new high as of Wednesday.
This positive news is believed to have happened due to the improvement in the US economic growth in the third quarter, solid consumer spending took place last month, and there is a renewed optimism on Wall Street that due to a trade deal with China, a recession will not happen.
Here are some very positive factors that have played a key role in US economic growth:
The S&P was up 0.27% and the Dow Jones Industrial Average rallied 0.19% This helped both indexes that are experiencing a record-setting run that has been witnessed over the past few months with record highs.
The most recent indicators showed that the US GDP rose to 2.1% in the third quarter up from the previous reading of 1.9%. This has also indicated that the slowdown in business investment could actually be stabilizing.
Adding to that, economic prospects were even more improved by a rise in US consumer spending over last month and are expecting a greater rise thanks to Black Friday and Christmas shopping.
Also, the number of people filing for unemployment fell significantly, helping to further drive off the negative thoughts of a recession in the short term.
The booming economic data helped heighten the rising optimism on a trade deal with China. It's believed this was aided by Trump's comments on Tues that the US in the final struggles with phase one of the agreement.
Contributing to the market's recent rally, third-quarter corporate earnings have shown better than expected. Of the 484 companies in the S&P 500 reported earnings, 75% have beaten estimates compared to 18% that have missed, according to Rifiniti data. In an average quarter, only 65% of companies beat estimates and 20% miss expectations
Just this year, the S&P 500' was up by 25% while the Dow rose nearly 21%. The S&P 500 hit more than 12 record highs just in the past month alone.
According to Brad McMillan, chief investment officer at Commonwealth Financial Network, said across the board, a string of new highs reflect both the optimism and strong demand for stocks and it's believed that trend will continue.
Recession fears seem to be on the back burner, as US stocks are expected to continually rise in 2020 but at a more moderate pace than experienced this year, according to a survey by Reuters.
The market will enjoy a boost by greater stable global growth, accommodating central bank policies, and a recovery in US earnings, according to polled strategists.
The risk factors for 202 include the presidential election which could cause political uncertainty or the continual US-China trade war that is continuing to harm global economic growth.