Market Insights: Did this year’s Santa Claus rally come early?
RJ Hamster
Stock market up in November – can the rally continue?
Popular U.S. stock market indices advanced between 8.8% and 10.7% in November, with 10 of 11 S&P 500 sectors posting gains. Consumer Discretionary, Financials, Information Technology and Real Estate sectors all were up 10% or more.
Global inflation is down in the wake of interest rate hikes by the Federal Reserve and other global central banks. As inflation recedes, investors increasingly anticipate potential interest rate cuts next year, which helps support rising stock prices today.
November stock market performance was strong. Broad-based strength across indices and sectors is an indicator of a market poised for the potential to make further gains. During last year’s so-called Santa Claus rally period, which typically spans the final five trading days in December and the first two trading days in January, the S&P 500 rose 0.8%.
The third quarter reporting period is effectively over. Sales and earnings advanced 1.8% and 4.5%, respectively, over a year ago, modestly exceeding expectations and likely contributing to positive market momentum as investors look ahead to the new year.
Although stocks advanced in 2023, market leadership is concentrated among a relatively narrow band of S&P 500 sectors, with technology dominating. What does this mean for investors?
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