Backbone of US economy “rock solid”, 2020 to be “super year” for stocks

Markets were mostly higher on Friday.

The S&P 500 rose 0.5 percent to another record high and the STOXX Europe 600 rose 0.8 percent. However, the Nikkei 225 fell 0.2 percent.

While a report on Friday showed that the estimate of US third-quarter GDP growth was unchanged at an annualised 2.1 percent, another report showed that US consumer spending rose 0.4 percent in November, the biggest increase since July.

“Despite the late start to the holiday season, U.S. consumers were in a festive mood, suggesting the backbone of the economy remains rock solid,” said senior economist Sal Guatieri of BMO Capital Markets.

“Overall, the bottom line is that the economic numbers keep coming in strong,” said Joe Saluzzi, partner, co-head of Equity Trading at Themis Trading.

MUFG chief economist Chris Rukey said that with core consumer inflation low, “you can bet your bottom dollar, the Federal Reserve is going to keep enough punch in the punch bowl to make sure that 2020 is going to be a super year for stocks”.