[Reuters] A year after the U.S. stock market plunged, many investors believe conditions are in place to avoid another year-end pullback and possibly set the stage for a rally to finish off 2019.A more accommodative Federal Reserve compared with a year ago is an important argument for investors who are confident the market is unlikely to see a repeat of 2018’s swoon.
Last year, investors were concerned the Fed was raising interest rates too quickly. By contrast, the Fed has been cutting rates this year, and while the central bank is not expected to lower rates again in December, it also is not expected to raise them.
Another change from a year ago, cited by investors: Stock markets globally are more synchronized in their strong performance.
"The prospects this year are better," said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee. "It’s not just the U.S. that’s doing well right now. It’s happening in lots of places around the globe, and that puts investors in a more risk-taking mood."
One wild card for markets heading into year-end is the United States’ trade war with China. The dispute remains unresolved, but there is optimism about a preliminary U.S.-China trade agreement that could also lift stocks into the new year.
Investors are still wary of last year's stock market collapse. The benchmark S&P 500 .SPX fell 19.8% - barely avoiding a bear market - between Sept. 20 and Dec. 24.