The S&P 500 ended 0.2% higher, while the Nasdaq Composite gained close to 1%. All seven shares of the so-called ‘magnificent seven’ ended with gains of up to 3% on Monday. The Dow Jones ended 130 points lower after briefly trading above the mark of 45,000 intraday.
- Apple shares ended at a record high
- Tesla gained over 3.5% after an upgrade to “buy” at Roth MKM
- Super Micro Computer gained 29% after probe found no evidence of misconduct
- Amazon gained over 1% ahead of the start of the holiday shopping season on Cyber Monday
Treasuries pared losses after Fed Governor Christopher Waller said he’s inclined to vote for a rate cut in December, with swaps pricing in more than 70% of a quarter-point reduction this month.
Even after the strongest rally since the early days of the dot-com boom, the S&P 500 still has room to push higher, according to JPMorgan Chase & Co.’s Andrew Tyler. He says the most popular options trades are wagering the benchmark will hit 6,200 to 6,300 this month. The gauge ended Monday just shy of 6,050.
The highlight this week will be Friday’s payrolls report, which is expected to show US hiring jumped in November after hurricanes and a major strike undercut job growth a month earlier. On Wednesday, Fed Chair Jerome Powell participates in a moderated discussion, and investors will await any assessment of the job market and inflation as well as clues to whether the central bank will lower rates in December.
Seasonal trends in December favor equities in general, but heading into year-end / 2025, it’s worth noting that positioning and sentiment are pushing toward extremes, while charts remain overbought against negative divergences in momentum, said Dan Wantrobski at Janney Montgomery Scott.
“The markets are priced to near-perfection, in our opinion, and this still renders them vulnerable to pullbacks as we move toward the first quarter of the new year,” he said. “Our outlook is for a correction within the magnitude of 10% to 15% to strike at some point during the first half of next year.”
Ed Clissold at Ned Davis Research says that when the S&P 500 has notched at least 50 record highs in a year, the next year the index has risen only two out of seven times, with a median loss of 6.2%.
“The fact that there have not been any breadth thrusts, or an extremely high percentage of stocks rallying together, since the election” suggests that the rally is not as broad as it was earlier in the year, he said. “Continued narrowing would set the stock market up for a tougher 2025.”
Following a significant surge in volatility over the summer, Wall Street’s “fear gauge” — the VIX — has dropped below 14. The previous regime shift in expected volatility from above 20 to below 14 occurred in the fall of 2023 — leading to a 10% gain in the S&P 500 over the subsequent three months, according to Dean Christians at SentimenTrader.
(With Inputs From Agencies.)
