The stock market is constantly setting new highlights in a rally that no one saw coming

Faced with a series of frightening headwinds and coming out of a tough year, Wall Street saw a poor view of the shares in 2019. As a result, many major analysts missed one of the best years in this historic future beef market to continue. to make new highlights.

Of the 17 forecasts that CNBC tracks for the S&P 500 award, only three have targets that are above where the broad market index traded on Monday. The median 3000 target is 2.7% below mid-day, with still almost two months left to the year.

While the market path is always unknown and may come back before the calendar goes to 2020, the year looks like a missed opportunity for those who bought into pessimism. The S&P 500 continues to climb to new highs, while the sister index, the Dow Jones Industrial Average, also set a new high water mark on Monday.

Dow is nearing an 1[ads1]8% gain for the year while the S&P 500 has reached close to 23% and even the small cap Russell 2000 is ahead of more than 18%.

"I don't think you can blame people for being a little cautious or skeptical," said Sam Stovall, chief investment strategist at CFRA Research. "If anything, the growth in revenue growth for this year has fallen, and earnings expectations for next year have come down."

Indeed, the S&P 500 is in the midst of a revenue recession that is on track to show the third consecutive quarter of negative year-over-year growth. Despite a rate of 76% compared to expectations, earnings are still projected to show a 2.7% decline in the third quarter, according to FactSet.

But it's been more than that for years.

A variety of opinions [19659009] Wall Street has been provoked by concerns about a potential recession, US-China tariffs and several geopolitical concerns such as how Brexit will turn out.

The market continues to go higher and defy naysayers. The observation "most hated beef markets in history" that is often repeated on Wall Street may have become the worst cliché in beef market history as averages continue to push into a new record territory.

"You wonder what causes the market to En [factor] is that the lack of alternatives continues," Stovall said, citing "TINA" the belief that there is no alternative to US equities.

Stovall is among the many Wall Streeters who underestimated the strength of the market. He set a 2,975 target on the market, but was by far not the most pessimistic. UBS is the lowest on the street with a 2,550 price target while Morgan Stanley has been consistently bearish with its 2,750 estimate.

In fact, Morgan Stanley is not only bearish on 2019, but believes low returns will continue for the next decade due to high valuations. Andrew Sheets, chief strategist for the business, said the return would be "challenging" given the set-up from the subsequent price-earnings relationship.

On the other hand, strategists including Piper Jaffray's Craig Johnson, who has been one of Wall Street's biggest bulls for years and has a 3,125 target for the S&P 500. Although true to market trends, Johnson said "we wasn't perfect all the time "when it comes to timing, and he understands the skepticism of appreciation.

"I think many investors are struggling with valuation. As this market has moved up, stocks have been quite expensive," Johnson said. "Many investors were caught off guard in Q4 last year. These memories are still fresh in the mind of the large, dramatic offering that wiped out many bonuses for people last year. That's the psychological obstacle."

to the mattresses

Fourth-quarter sales last year were driven by sluggish economic growth combined with a Federal Reserve that seemed toned down for what happened. Two verbal mistakes by Fed leader Jerome Powell, pointing to a tighter policy going forward, fueled the belief that a year when the market fell 6.2% could bleed in 2019.

Investors responded by setting prices.

Money market fund balances this year have risen to $ 3.5 trillion, the highest in ten years and up 23.7% so far this year. Retail investors alone have squeezed $ 324 billion into the money markets in 2019, a 32% jump.

The sentiment has gone too late, if not among the big Wall Street houses, at least with the mom-and-pop crowd that has been cheered by three Fed rates and a macro scenario that no longer looks as bleak as a few months ago. Bullishness, or the belief that the market will be higher in six months, was at a 12-week high of 35.6% in the latest American Association of Individual Investors survey, with the bears falling to 28.3%.

Among professional investors skepticism is still high.

The wait-to-talk ratio, which is a measure of emotion among option traders, has remained above 1 since mid-September, a counter-indicator that the market may be headed higher due to strong negative sentiment. [19659002] "It is worrying that we will be disappointed with the trade issue, financial data and earnings," said Quincy Krosby, chief marketing strategist at Prudential Financial. "Nothing stays the same forever. We've started to see relief in all of the above. That doesn't mean it's the perfect scenario for the market, but it's perfect enough to get the volume and breadth to start picking up . "

For the bulls, one of the major factors could simply be that the signs of a recession that had shot up during the summer have been tame.

The inversion of the bond curve, where shorter dated yields were higher than their longer-term counterparts, has since declined. Inversions have preceded each of the last seven recessions, but there is a sense that this time may be different due to unusual factors playing out in the bond market, although GDP growth in the fourth quarter looks like it will struggle to top 1%. [19659002] Regardless, a lack of a recession will be a huge burden lifted from a market that has struggled to inspire confidence throughout the year.

"The draw has not died. There are those who still see that it is a recession and the market is forgetting it," says Krosby. "The fact is that the market suggests that it is not a recession that is imminent and that the market was ready for recession for too long. "

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