S&P 500, Nasdaq Hit Record Highs, But Can It Last?

The S&P 500 and Nasdaq Composite rallied to new highs to begin the shortened trading week ahead of Thanksgiving, but can the rally sustain itself through the rest of 2019?

Technology headed up the sector leaders in Monday’s trading session with heavy hitters like Amazon and Apple leading the way. However, the markets could be pricing in a “phase one” deal, which has yet to happen.

The market still expects a phase one deal that (most importantly) removes the threat of any further escalation in the trade war,” said Tom Essaye, founder of The Sevens Report, in a note. “But unless there is a material positive surprise, phase one is not going to include material existing tariff reductions (there might be some, but likely not much), and as such it’s unclear exactly how much it’ll help global growth rebound.”

The major U.S. indexes are feeling the good vibrations in the markets with latest highs and now, a U.S.-China trade deal may be close to finalizing at least a “phase one” deal. All this creates an opportunity for investors to capitalize on the Direxion FTSE Russell US Over International ETF (NYSEArca: RWUI).

RWUI features:

  • Seeks investment results, before fees and expenses, that track the Russell 1000®/FTSE All-World ex-US 150/50 Net Spread Index (the “index”).
  • The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in securities that comprise the Long Component of the index or shares of ETFs on the Long Component of the index.
  • The index measures the performance of a portfolio that has 150% long exposure to the Russell 1000® Index (the “Long Component”) and 50% short exposure to the FTSE All-World ex-US Index (the “Short Component”).

Investors looking to play the other side can use the Direxion FTSE International Over US ETF (NYSEArca: RWIU)  to capitalize on international equities will outdoing U.S. equities. RWIU seeks investment results, before fees and expenses, that track the FTSE All-World ex US/Russell 1000 150/50 Net Spread Index, which measures the performance of a portfolio that has 150 percent long exposure to the FTSE All-World ex US Index and 50 percent short exposure to the Russell 1000® Index.

Trade war pessimism and recession fears may be offering gloomy forecasts for U.S. equities in 2020, but global investment firm Goldman Sachs is painting a more positive picture. The firm is anticipating a stronger showing in a year that will be dominated by the presidential election.

“The equity market is anticipating an acceleration in US economic growth during the coming months,” said David Kostin, Goldman’s chief U.S. equity. “Investors who want to capture further cyclical upside can improve risk-reward by narrowing their focus to select cyclical stocks.”

For more market trends, visit ETF Trends.