The US economic fundamentals are good as real GDP is rising at an annualised rate of 3.1%, up from +2,5% a year earlier. Whilst not a boom is definitely not deflationary so supportive for stock prices as the economy continues to chug along.

A stable strong economy can further be seen in the unemployment statistics of just 4% up from a low of 3.8%. However this will be one to watch as if unemployment keeps rising over the coming months to say 4.3% that could act as an advance warning of a recession some 6 months later.

Whilst inflation has dipped back below the Feds 2% target at 1.5% hence the Fed's dovish comments.

So the fundamentals are supportive of rising stock prices for 2019.

P/E Ratio

The stock market is about 25% CHEAPER than it was a year ago. Recent history suggests a PE of 25 is a bit toppy, so not surprising that 2018 was a flat year. So 18 is supportive of rising prices for 2019.

The article in this series concludes in a detailed trend forecast for the Stock Market covering the 6 months to September 2019.

However the whole of this analysis has first been made available to Patrons who support my work.

So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Your Analyst

Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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