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The global economy has thrown the kitchen sink on President Trump's rally, but so far nothing has stopped it.
The S & P 500 gained 18.7% this year, even as traders were struggling with vast areas of geopolitical uncertainty and worrying economic data.
"Reversal of the yield curve, trade war between the United States and China, recession in Germany, collapse of Chinese industrial production, shrinking global profits, soaring oil prices, BREXIT, Trump tax investigation , Argentina default / Ford bankruptcy / Thomas Cook … but still risking assets near all-time highs and US stocks on track for annualized returns of 30%, global equities by 24%, 17% commodities, 14% high-quality, high-yield global bonds, 10% US Treasuries … breathtaking, "said Michael Hartnett, chief investment strategist at Merrill Lynch, of Bank of America, wrote in a note to customers Friday, calling it a "miracle on Wall Street".
Trump, who likes to use the stock market as a scorecard for his presidency, could not agree more with such sentiments.
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"Do you think luck has allowed us to reach the best stock market and economy in our history?", Tweeted the president earlier this month. "It was not!"
The S & P 500 has gained 39% since closing on November 8, 2016, thanks to Trump's tax cuts and deregulation. The reference average has set 102 records since polling day, and Bank of America predicts that the good times will continue, at least for now.
"We remain 2019 irrationally optimistic," analysts wrote. Not everyone is so sure.
Hubert de Barochez, a market economist at London-based Capital Economics, said the slowdown in earnings growth could threaten the bull market of more than 10 years, the longest in history. He sees the S & P 500 falling by 15% by the end of the year.
"We do not expect a recession in the United States," he wrote. "But the manufacturing sector and the yield curve are sending worrying signals, and we think the US economy will continue to slow in the coming months." Growth in the rest of the world – where the S & P 500 companies realize about 40% of their profits – remains low ".
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