Wall Street expected to stall, resume gains in 2019

NEW YORK: Wall Street’s longest ever bull run should slow its charge to end the year around current levels as global trade tensions linger and earnings growth weakens, factors that will also limit gains in 2019, a Reuters poll found.

The S&P 500 will end 2018 at 2,909, down slightly from its intraday record of 2,916.50 reached Wednesday, but up around nine per cent for the year, according to the median forecast from 55 strategists polled by Reuters in the last two weeks.

By year-end 2019 the benchmark will reach 3,100, up around 6.6 per cent from the end-2018 forecast, the poll forecast.

“Whilethepathof leastresistance certainly feels higher short-term, we wouldn’t be surprised to see the S&P 500 finish the year at or around current levels,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York.

The S&P has already surpassed Grohowski’s year-end expectations, and he expects modest gains in 2019.

“We think the mid-term elections and a potential December rate hike by the Fed could lead to some profit-taking. That said, we are still overweight equities based on a positive 12 to 18 month forward assessment,” he said.

Earnings at S&P 500 companies are expected to rise 10 per cent in 2019, according to Thomson Reuters data. That compares with 23.3 per cent growth estimates for 2018 and 24.9 per cent so far in the second quarter and 26.6 per cent in the first three months of the year.