The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Turkey time!
Overseas markets gave thanks early, with Japan and Europe rallying 1.8% and 1.5% respectively. US investors gobbled up stocks for the fourth consecutive session. S&P futures whet bulls’ appetites, trading +10 to +30 before the open. The index popped out of the oven around +30 and rested for 90 minutes. Hungry investors dug in and brought the index to the dinner table, in the +50 to +60 range. Tryptophan finally kicked in and the afternoon was a sleepy affair. Treasury yields were a pleasant side, as the curve flattened. Fed Funds futures remain priced at 80% for a 25-bip cut, suggesting bullish leftovers will last until the December 10th FOMC decision.
Whether we’re experiencing seasonal joy, spilling over into capital markets, I can’t say. The national polls and ugly news stories suggest negative moods out there in American life. It’s difficult to see the happiness and prosperity that’s out there when one reads the papers. Yet there is obviously optimism out there. Is that unreported positivity expressing itself in the stock market? Or is the stock market, thanks to its performance, merely a visible forum for it?
I’m unsure, but this time of year celebration is tradition. There is an observable seasonal effect and while it was missing for most of November so far, it appears to be back just in time for passing the gravy. If there is to be a 2025 Christmas rally, it has already begun but it’s not too late to hop on.
Markets are expecting more reward than risk for the rest of the year. Announced events and pending data releases don’t appear likely to surprise to the downside. The markets are projecting healthy economic data and an assist from the Fed. The year is already a bullish one and the naïve expectation is that we’ll finish with a bullish year with a bullish run. Who am I to argue? Perception is reality after all.
Bolt-from-the-blue risks are the only risks in the near term. Those never bothered the longs though and probably never will.
Happy Thanksgiving everyone!
US markets are closed tomorrow, see you Friday.
-Mike
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