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The market is entering the final two trading days of 2024, and stocks are set to post another strong year of gains.
You are watching: What to know this week
The Nasdaq Composite (^IXIC) once again led the charge in 2024, rising more than 30% thus far while the S&P 500 (^GSPC) has risen over 25%. The Dow Jones Industrial Average (^DJI) is up a more modest 14%.
A holiday-shortened trading week with limited news on the docket is expected to greet investors in the final trading week of the year. Markets will be closed for New Year’s Day on Wednesday, and no major companies are slated to report quarterly results.
In economic data, updates on housing prices and sales, as well as a a look at activity in the manufacturing sector, are expected to highlight a subdued week of releases.
Markets are three days into the highly anticipated “Santa Claus” rally, which is statistically one of the most consistent seven-day positive stretches of the year for the S&P 500.
But stocks have not been in the holiday spirit. All three major averages sold off Friday, with the Nasdaq falling nearly 1.5%.
Since 1950, the S&P 500 has risen 1.3% during the seven trading days beginning Dec. 24, well above the typical seven-day average of 0.3%, according to LPL Financial chief technical strategist Adam Turnquist. History has shown that if Santa does come and the S&P 500 posts a positive return during the time period, then January is typically a positive month for the benchmark index and the rest of the year averages a 10.4% return.
When the S&P 500 is negative during that time frame, January usually doesn’t end in the green, and the return for the upcoming full year averages just 5%, per Turnquist. Three days into this year’s Santa Claus period, which will close on Friday, Jan. 3, the S&P 500 is down less than 0.1%
While history may be flashing a warning sign, it’s notable that last year the Santa Claus rally didn’t materialize. January started poorly too. Still, the S&P 500 is still set to end the year up more than 20%.
As markets have digested the Federal Reserve’s recent message that interest rates may remain higher for longer than investors had hoped, bond yields have been soaring. The 10-year Treasury yield (^TNX) is up more than 40 basis points in December alone.
Hovering right above 4.6%, the 10-year is at its highest level in about seven months and in the territory where equity strategists believe higher rates could begin to weigh on stock performance.
“I think 4.5% or higher on the 10-year gets problematic for the markets more broadly,” Piper Sandler chief investment strategist Michael Kantrowitz said in a recent video sent to clients.
See more : Stock Market News Today: Stocks Rise in Shortened Trading Session
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