Wall Street’s famous ‘Santa Claus rally’ is approaching, but the Dow Jones Industrial Average ended the week in December with losses. The US stock market has been struggling ahead of the holidays, despite a recent strong rally in November. Mark Hackett, chief market strategist at Nationwide, described the current situation as an “almost light-switch moment” and a “breakdown in breadth.” This marks a significant shift from the previous month’s strong performance.
Hackett believes that investors are gearing up for the holiday season, which often sees increased buying activity. As a result, he anticipates a potential rebound in the market during December, fueled by the traditional ‘Santa Claus rally.’ The phenomenon is characterized by the stock market’s recovery as the year winds down, with investors seeking gains before the close of 2023.
The Dow’s decline this week may signal that the market has reached a turning point. As investors prepare for the holiday season, they are likely to shift their focus from selling to buying, potentially leading to an uptick in stocks. With the “Santa Claus rally” on the horizon, market participants should be cautious but also optimistic about the potential rebound.
Source: https://www.marketwatch.com/story/wall-streets-santa-claus-rally-window-is-about-to-open-with-the-dow-down-in-december-420264a3