Happy New Year
As we start the new year in a different angle to last year where recession was on the cards and we were about to go into a heavy rate hike cycle. Now this year with no recession on the cards and the market is looking for a rate cut cycle. Really big question is will the bond market get what it wants and we see the amount of cuts that are priced in. Futures pricing continues to point to a roughly 85% chance the Fed will start to ease rates in March, according to the CME FedWatch tool, while more than 150 basis points of rate cuts from the European Central Bank have similarly been priced in for all of 2024, and roughly 140 bps from the Bank of England. Just remember the first 2 days to start of the year are generally strong as this is the last 2 days of the Santa rally. Seasonally Q1 on average is generally weak in an election year. Another big question is will this rally continue and who will lead the way… Will the SMID caps names lead or will the Mag 7 names continue to lead.
STAT: S&P 500 closed 2023 with its 9th consecutive up week, marking the longest weekly win streak since 1985. 1989 & 2004 also experienced 9-week streaks. The record is 13 straight, which happened in 1957.