What Investors Believe Will Influence Stock Prices in 2020

This week’s Sentiment Survey special question asked AAII members what they think will most influence the direction of stock prices in 2020. Approximately 39% of respondents believe that geopolitical events will have the most influence on stock prices in 2020. Unsurprisingly, the ongoing conflicts with Iran and China are named specifically. Domestic politics are also named by many respondents, with 26% stating that the outcome of the November elections will most likely influence the market. Additionally, 18% of respondents from this survey believe that earnings performance will sway the stock market and 17% say that the Federal Reserve’s policy and a low-interest-rate environment will have the biggest influence on how the stock market will move in 2020.

Here is a sampling of the responses:

• “The economy and earnings. And maybe an end to some of the trade wars.”
• “The Fed will need to continue to lower rates and will probably need to continue its easing to maintain liquidity in overnight lending.”
• “Strong business cycle in the U.S. and better trade agreements with China.”
• “Earnings versus forecasts.”
• “Conflict in the Persian Gulf and the 2020 election will increase uncertainty.”

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