5 reasons to be bullish on the US stock market, according to LPL

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Stocks have been on a “wild ride” so far in 2020: from showing virtually no volatility at the start of the year, to experiencing the fastest bear market in history and then staging the strongest 100-day rally on record, LPL said in a note on Monday.
And while the market continues to face risks stemming from the COVID-19 pandemic, election uncertainty, and the potential for heightened trade tensions with China, investors should continue to hold on for the potential of more gains ahead, LPL said.
LPL raised its year-end S&P 500 fair-value target to a range of 3,450 to 3,500, the note said.
Here are five bullish reasons the stock market can continue to move higher into year-end, according to LPL.
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The stock market has been on a “wild ride” so far in 2020, LPL Chief Market Strategist Ryan Detrick observed in a note on Monday.

From exhibiting virtually no volatility at all at the start of the year, to experiencing the fastest bear market in history, to staging the strongest 100-day rally on record, it’s been a rollercoaster for sure.

Despite experiencing a 35% intra-year decline, the S&P 500 is up 5% year-to-date as of Monday’s close, and that’s after the recent two-week decline of 7%.

But the market faces risks that could lead to a bumpy ride for stocks into year-end that investors should consider, including the lingering COVID-19 pandemic, heightened trade tensions with China, and election uncertainty, according to LPL.

JPMorgan seems to agree, having pointed out earlier this week eight risks stocks face heading into year-end.

Still, investors should continue to hold on for the potential of more gains ahead, LPL said, adding that it is raising its year-end S&P 500 fair-value target to a range of 3,450 to 3,500, representing potential upside of 2% to 3% from Monday’s close.

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Here are five bullish reasons the stock market can continue to move higher into year-end, according to LPL.

Read More: Morgan Stanley pinpoints the most attractive opportunity it sees for investors as a new bull run takes shape — and shares 3 strategies for generating market-beating returns

1. “We’re getting COVID-19 under control.”

While COVID-19 hotspots remain and school re-openings are mixed across the country, “the national numbers have improved steadily over the past couple of months,” Detrick said, noting that daily cases have fallen by 50% from the July peak of 70,000 cases. Hospitalizations and the daily number of deaths have also been on the steady decline. “We now have a better playbook of how to contain the virus’ spread and treat patients than we did in the spring,” says Detrick.

2. “Economic reopening continues.”

“Economic data has consistently beaten expectations as the economy has reopened,” according to LPL. Third quarter gross domestic product could reach a record 30% annualized, based on the Atlanta Federal Reserve’s GDPNow forecast tracking to 29.5% and Goldman Sachs recently boosted its GDP estimate to 35%, the note highlighted. 

“Retail sales have passes their pre-pandemic peak, and housing is booming,” …read more

Source:: Business Insider

      

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