Economist Mike Walden: How to Judge the Stock Market in 2019

This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at judging the stock market in 2019.   Mike, 2018 ended with some wild swings in the stock market, prompting worries from many investors.  What are the factors now influencing the market, and how will they play out in 2019?

  1. In March 2009 the DJIA was 7000 – recently it was over 26,000 before a pullback
  2. So the stock market has had a good run during this economic recovery
  3. Recently the market has been volatile – reflects heightened uncertainly over whether the economy will continue to perform
  4. Worries are beyond simply concern over a recession
  5. Worries include the trade war – particularly with China, slow growth in some major foreign countries, the Fed’s interest rate policy, and what will be the outcome of divided gov’t in Washington
  6. Some measures do show the stock market being over-valued
  7. If person is a long-term investor, most experts would say sit tight
  8. If a trader, must pick an outcome – will economy ignore these issues and still perform well, or are we at the end of the current growth cycle

And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.