Final Week of 2023 Expected to Bring Quieter Trading on Wall Street
As the final week of 2023 kicks off, Wall Street is expected to see much quieter trading after a ferocious rally that brought the US stock market within striking distance of its record, according to Bloomberg.
The S&P 500’s longest weekly run since 2017 resulted in equities edging higher amid low volume, with the American stock gauge less than 1% away from its all-time high. The Federal Reserve’s dovish pivot this month fueled risk appetite and led to warnings about a potential pullback.
The so-called Santa Claus rally, which encompasses the last five trading sessions of the year and the first two of the new one, typically has a strong record dating back to 1969. According to the Stock Trader’s Almanac, the S&P 500 has averaged a gain of 1.3% over the seven-day period.
“The ‘Santa Claus Rally’ indicator officially started last Friday,” said Craig Johnson, chief market technician at Piper Sandler. “We expect any pullbacks will be modest and short-lived as investors follow the eight-week uptrend toward new highs.”
In terms of economic data, the calendar is thin for this week, with home prices rising for a ninth straight month. Additionally, early data from Mastercard SpendingPulse shows that US holiday retail sales rose at a slower pace compared to the previous year.
Treasuries were mixed ahead of a $57 billion sale of two-year notes at 1 p.m. New York time. The US bond market booked a fourth-straight week of gains on building investor confidence that the Fed will begin cutting rates next quarter.
In corporate news, FedEx Corp. entered into an accelerated share repurchase agreement with Mizuho Markets Americas, the White House declined to overturn a sales ban on Apple Inc.’s smartwatches in the US, and Intel Corp. announced a $25 billion investment in Israel. Additionally, Bristol Myers Squibb Co. agreed to buy RayzeBio Inc. for about $4.1 billion.
Oil prices rose as tensions remained high over shipping disruptions in the Red Sea due to a spate of Houthi attacks against vessels and after US military strikes in Iraq. Shipping stocks were broadly lower after Maersk said it’s preparing to resume shipping through the Red Sea.
Key events to watch this week include China industrial profits on Wednesday, Japan industrial production and retail sales on Thursday, and US wholesale inventories and initial jobless claims on Thursday.
As of 11:34 a.m. New York time, some of the main moves in markets included:
– The S&P 500 rising 0.3%
– The Nasdaq 100 rising 0.4%
– The Dow Jones Industrial Average rising 0.3%
In currencies, the Bloomberg Dollar Spot Index fell 0.2% and the euro rose 0.3% to $1.1036.
In the cryptocurrency market, Bitcoin fell 2.8% to $42,317.01, while Ether fell 2.2% to $2,222.97.
The yield on 10-year Treasuries was little changed at 3.90%, and West Texas Intermediate crude rose 3.1% to $75.86 a barrel.
This article was produced with the assistance of Bloomberg Automation and with contributions from Esha Dey, Jessica Menton, Carter Johnson, Liz Capo McCormick, and Felice Maranz.