Dow Jones, Nasdaq 100, S&P 500, Gold, Fed, Trade War - Talking Points
- Wall Street[1] and gold prices[2] rallied in 2019 on trade deal bets, monetary policy
- US-China “phase two” deal uncertain this year, attention focuses on the Fed
- Technical outlook for Dow Jones, Nasdaq[3] 100, S&P 500 [4]and gold analyzed
Dow Jones, Nasdaq 100, S&P 500, Gold Price Recap – Rallying in Tandem
The Dow Jones, Nasdaq 100 and S&P 500 began last year on a shaky footing after plummeting in the fourth quarter of 2018 which would see them close the year with a negative return. In the months to follow, US equities continued higher despite a lingering trade war that worked to create volatility and uncertainty alike.
Will the Stock Market Crash in 2020?[5]
While stocks fluctuated wildly on the back of new trade war developments, gold emerged as an attractive investment amid the uncertainty and began to establish solid returns as the year progressed. Further, trade war headwinds worked to erode global growth forecasts which sent recessionary fears soaring and stocks retreating. The fundamental forces at play made it seem as though US equities were destined for another year of losses if not for a key tailwind, the Federal Reserve.
Monetary Policy and Repurchase Agreements
Originally planned for 2019 was a path that envisioned three rate hikes. But this outlook quickly reversed course amid growing concerns about the health of the global economy as trade wars heated up. In the end, the Fed cut rates three times last year instead. Another crucial development in driving equities and anti-fiat gold prices higher was the swelling in the Fed’s balance sheet amid a sudden cash shortage in the financial system.
In late September 2019,
