The next week, which is shortened during the holiday, will conclude with a A brutal year for Wall Street As the year 2022 draws to a close.
The US stock and bond markets will be, too Closed Monday 26th DecemberIn celebration of Christmas.
Gains and economic calendars will be muted, with much of the business world stalled until next year.
Traders working during the holiday period will get readings on wholesale and retail inventories, weekly jobless claims, and the latest home price index from the S&P CoreLogic Case-Shiller.
When investors return from a long weekend on Tuesday, Hopes are high for the Santa Claus rally – A seasonal rise in the stock market that occurs at the end of December. But with selling pressure still lingering due to fears of a looming recession, the off-season pattern could go awry this year.
The Santa Claus Rally is usually defined as the last five trading days of the year and the first two trading days of the new year, with Yale Hirschcreator of the Stock Trader’s Almanac, who coined the term in 1972.
During this period, the S&P 500 has historically posted an average gain of 1.3% dating back to 1950, according to Data from LPL Financial. This compares to an average return of 0.2% for all seven-day returns.
Most importantly, Santa Claus Rally is often seen as An indicator of future market performance. LPL Financial noted that the S&P 500 historically underperformed in January and over the next year when a year-end rally failed to materialize.
Yale Hirsch even predicted: “If Santa Claus fails to call him, bears may come to Broadwall.”
Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance, said, “It’s not too late for Santa Claus to hike interest rates, but unfortunately the positive inflation data has been overshadowed by the Fed’s tough language and the upcoming recession they’ve coordinated with their aggressive rate increases. Benefit”. said in a note.
As the year draws to a close, 2022 is so far on track for its worst annual performance since the global financial crisis in 2008. It will also mark the end of three straight years of gains for the stock market, and a dramatic crash from 2021, which saw The S&P 500 yield is nearly 27%..
Much of that is due to Historical actions of world central banks, which raised interest rates closely to rein in the highest rate of inflation in decades after a period of intense fiscal stimulus. The US Federal Reserve has Raise interest rates by a cumulative 4.25%. This year, the largest number since 1980, while indicating the possibility of further hikes in the coming year.
After central banks delivered their final increases of the year last week, stock markets experienced their worst exodus on record. Outflows amounted to nearly $42 billionaccording to figures from Bank of America, Citigroup and Barclays, which each cited data from EPFR Global.
Looking ahead, there may not be much upside for equity investors in the coming year, as monetary policy makers around the world resolutely say they are certain of it. Press with tightening financial conditions In the coming year until price stability is firmly restored — a reality preparing for many of Wall Street’s biggest names A long road to nowhere for US stocks.
Last week, veteran hedge fund manager David Tepper said it was “Short the equity markets” Because of fears of rising interest rates, this will lead to more battering of stocks.
“I think the upside/downside doesn’t make sense to me when I have a lot of central banks telling me what they’re going to do,” the founder and president of Appaloosa Management said Thursday in an interview with Squawk Box on CNBC.
“Sometimes they tell you what they’re going to do, and you have to believe them.”
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Economic calendar
Monday: There are no notable reports scheduled for release. Markets are closed for the Christmas holidays.
Tuesday: wholesale stockon a monthly basis, preliminary November (0.5% over the previous month); Trade balance of advanced goodsNovember (-$96.8 billion expected, – $99.0 billion over the previous month); retail stockon a monthly basis, November (-0.1 expected, -0.2% over the previous month); FHFA Home Price Indexon a monthly basis, October (-0.6% expected, -0.1% over the previous month); S&P CoreLogic CaseShiller 20 City Compositeon a monthly basis, October (-1.40% expected, -1.24% over the previous month); S&P CoreLogic Case-Shiller 20 City CompositeYoY, October (8.20% expected, 10.43% over the previous month); S&P CoreLogic Case-Shiller US National Home Price Index, On an annual basis, October (10.65% over the previous month); Federal manufacturing activity in DallasDecember (-14.4 over the previous month)
Wednesday: Richmond Fed Manufacturing IndexDecember (-9 over the previous month); Pending home saleson a monthly basis, November (-1.0% expected, -4.6% over the previous month); NSA pending home salesYoY, November (-36.7% over the previous month)
Thursday: Unemployment claims ratesfor the week ending December 24 (216,000 over the previous week), Continuing claimsfor the week ending December 17 (1.672 million over the previous week),
Friday: There are no notable reports scheduled for release.
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Earnings calendar
Monday: There are no notable reports scheduled for release. Markets are closed for the Christmas holidays.
Tuesday: There are no notable reports scheduled for release.
Wednesday: Kale Maine Foods (calm)
Thursday: There are no notable reports scheduled for release.
Friday: There are no notable reports scheduled for release.
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Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @employee
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