December 26, 2023 | Daily JAM, Morning Briefing |
Stocks continued on an upward path in a classic Santa Claus rally. Wall Street kicked off the final week of 2023 with gains in stocks, extending a rally that put the market on the brink of a record. Today, December 26, the Standard & Poor’s 500 traded about 0.5% away from its all-time high of 4,796.56. The so-called Santa Claus rally, which typically encompasses the last five trading sessions of the year and the first two of the new one, has a strong record of gains. Since 1969, the S&P 500 has averaged a gain of 1.3% over the seven-day period, according to the Stock Trader’s Almanac.
December 15, 2022 | Daily JAM, Morning Briefing |
Yesterday, Fed chair Jerome Powell in his post-Fed-meeting press conference said that a recession in 2023 isn’t inevitable. Growth will stay positive next year, he continued, although “it’s not going to feel like a boom.” How much isn’t it going to feel like a boom? The Fed’s Dot Plot projections, updated for this meeting, predict 0.5% growth in U.S. GDP for 2023. That’s down from the 1.2% growth projected in the September Dot Plot. In 2024, the Fed said, growth will speed up to 1.6%, still not exactly a boom. In September the Fed projected 1.7% growth for 2024. And it will feel like a recession to many people.
December 14, 2022 | Daily JAM |
Today I posted my two-hundred-and-seventeenth YouTube video: Where Do We Go From Here?
Today’s topic: Where Do We Go From Here? We got better-than-expected CPI inflation numbers yesterday. Economists were expecting a 7.3% headline annual rate and we got 7.1%. For the core rate, expectations were at 6.1% and we got 6.0%. In the hour following the CPI report, the S&P 500 jumped about 1.6%. If the Fed announces the expected 50 basis point rate hike and doesn’t shock the market with unexpected bad news, we’ll likely see a traditional Santa Claus rally. The question of the Fed’s Dot Plot projections remains my long-term concern–as we try to understand how long the Fed will continue to raise rates and when we are likely to hit the Fed’s goal of a 2% inflation rate. We’re currently at about 7% and I expect getting down to 5% or so will be pretty painless. Beyond that, How we go from 4-5% to 2%? could be the crucial question for 2023. Until that 2% is in view for the Fed, I don’t think the central bank will back off completely. We’ll see if this Santa Claus rally can stay convincingly above 4,000 in the S&P 500. If we do move above that level, I think we can expect the rally to continue until about February or maybe even early March. And then we’re likely to see a drop in stocks because of a lower growth rate for corporate earnings and continued inflation fighting from the Fed.
December 12, 2022 | Daily JAM, Videos |
Today I posted my two-hundred-and-fifteenth YouTube video: Trend of the Week Nattering Nabobs of Negativity. This week’s Trend of the Week: Nattering Nabobs of Negativity. Spiro Agnew’s alliterative expression comes to mind as I listen to institutional Wall Street and big banks discussing the idea that we have not yet seen the bottom of this market and we could hit another big downturn in the first half of 2023. In the long term–February that is=–I agree. But I think we’re currently in a very short-term period where investors decide to ignore the long-term warnings and look to window dress portfolios (and maybe pick up some gains) before the end of the year. This short window of time will likely begin after the December 14 Fed meeting and run to the end of the year. As January and the new year rolls around, investors may finally come to grips with the warnings from banks and I’d bet that, true to form, they’ll try to beat the crowd to an exit. Pay attention very carefully to how you’re positioned over the next month.
January 4, 2022 | AAPL, Daily JAM, Jubak Picks, Volatility |
When I bought shares of Apple (AAPL) in my Jubak Picks and Volatility Portfolios, I was looking for gains from the end of the year rally (which kind of fizzed out) and the traditional Santa Claus rally (which came through as expected) to drive shares higher in the short term. Since that November 23, 2021 pick, shares of Apple, as of the close today January 4, were up 12% to $179.70, just above my $179 target price for this short-term trade.
December 27, 2021 | Daily JAM, Morning Briefing, Short Term |
Judging from the close of Monday’s trading session, there looks to be enough fuel for a Santa Claus rally to end 2021. The Standard & Poor’s 500 closed up 1.38% and the Dow Jones Industrial Average gained 0.98%. The NASDAQ Composite was ahead by 1.39% and the small cap Russell 2000 was higher by 0.89%.
December 19, 2021 | Daily JAM |
Trading volume gradually dries up as we get closer to the market’s Christmas holiday (stock markets are closed on Friday, December 24) and then the days before New Year’s when many on Wall Street take time off or work fewer hours. In Most years, bullish traders and investors try to take advantage of the low volume to see if they can leverage stocks higher in the final days of the year. Most years they succeed. Since 1950 the Standard & Poor’s 500 has averaged a 1.3% gain in a period that encompasses the last five days of the old year and the first two trading sessions of the new, according to the Stock Trader’s Almanac.
December 31, 2020 | Daily JAM, Short Term |
The Standard & Poor’s 500 closed up 0.64% today to a new closing high and ended the year ahead more than 16%. The Dow Jones Industrial Average also closed in record territory after a gain of 0.65% on the day. The Dow is up about 7% for 2020. The NASDAQ Composite managed a gain of 0.14% to bring its gain to 40% for 2020. Today’s advance in the Santa Claus period–which historically also includes the first two trading days in January so it’s not quite over yet–is a good omen for 2021.
December 30, 2020 | Daily JAM, Morning Briefing |
Today, Wednesday December 30, is pretty much the reverse image of yesterday’s stock market action. Traders are having fun–and making money, I’d hope–in the day to day action but I don’t see a trend in this market that might extend into 2021. So, for example, the Standard & Poor’s 500 was up 0.13% today at the close in New York after falling 0.22% yesterday
December 29, 2020 | Daily JAM, Morning Briefing, Short Term |
Yesterday stocks moved higher on news that President Donald Trump had actually signed the combined coronavirus stimulus/relief and government spending bill. I guess after contemplating the possibility of no bill and another government shutdown, even $600 checks seemed like a big deal. Today, not so much. Worries that Republican Senate Majority Leader Mitch McConnell will prevent the House-passed bill increasing the size of those checks to $2,000 from even coming up for a vote on the floor of the Senate were enough to trigger a mild retreat in stock prices.
December 28, 2020 | Daily JAM, Morning Briefing |
With President Donald Trump signing the coronavirus stimulus/relief and fiscal 2021 government spending bill, financial markets can go back to their favorite holiday week activity–using the opportunity afforded by shrunken volumes to push up stocks. As of the close on December 28 in New York, the Standard & Poor’s 500 was up 0.87% and the Dow Jones Industrial Average was ahead 0.68%. The NASDAQ Composite was higher by 0.74% and the NASDAQ 100 had gained 1.01%. The Russell 2000 small cap index was a laggard with a 0.38% loss. The iShares MSCI Â Emerging Markets ETF (EEM) also lagged on continued Alibaba (BABA) turmoil in China with a gain of just 0.28%. Too soon to tell decisively, where the very short term action will be, in my opinion. But the day’s action is suggestive of where we can look for gains.
December 21, 2020 | Daily JAM, Morning Briefing |
The major indexes aren’t showing much of a move today even on the news that a new coronavirus stimulus/relief bill is like to pass today (along with the massive fiscal 2021 spending bill for the rest of the government.) I think a good part of that lack of reaction comes since the market has been assuming a stimulus bill would pass for days if not weeks and the actual bill is priced in to a great degree. That isn’t to say that there weren’t big moves to the upside of the sort that I expect could be the order of the day during the low volume trading days around the Christmas and New Year’s holidays. In many years bulls try to use the low trading volumes during these days to generate moves to the upside.
