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2018 expected to be another strong year for stocks

2018 expected to be another strong year for stocks

(FinancialPress) — 2017 was a most impressive year for the stock market, which soared on the backs of major economic growth and gargantuan corporate profits. The tech-filled Nasdaq was the biggest winner, with a 29% rise. It was followed by the Dow, which gained 25% while the S&P 500 went up 20%.

President Trump‘s promise to cut taxes, with the backing of a Republican-led Congress, also helped fuel the rally. The cuts, over time, will mean billions in savings for corporations.

Those factors combine once again 2018, painting a very promising landscape for stocks. Savings in taxes translate to higher overall profits in corporations – whic would lead to the S&P500 experiencing a new boost in the new year – said CIS for LPL Financial, John Lynch.

Analysts are also expecting the strong economy of 2017 to replicate itself in 2018, albeit at a noticeably slower pace. This was a major factor of the stock market‘s performance in the past year.

The U.S. economy is forecasted to experience a 2.5% growth per quarter throughout 2019 and 2020 by Wells Fargo. While that would set the record for  longest expansion in decades, it would also be one of the weakest expansions since the second World War.

A weak expansion could be the reason why it‘s been growing with no stops since 2009 – so it‘s not necessarily a negative.

Consumers are going into 2018 with confidence, likely as a result of 2017‘s strong stock and job markets.

“Consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018,” Lynn Franco, director of economic indicators at the Conference Board, stated.

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