Market Continues Record Streak: Santa Claus Rally in Full Swing

“Life is like riding a bicycle. To keep your balance, you must keep moving.” – Albert Einstein

Happy Holidays!

The Santa Claus rally that started a few weeks back continued as the market logged its 53rd record high for 2024. While the Scrooges bemoaned inflation and tariffs, other investors embraced the strong economic data and loaded their sleds with market returns. All 11 Sectors returned positively, with Cyclicals and Financials leading the way. Advancing issues more than doubled declining issues on light holiday trading. The S&P 500, The Nasdaq Composite, and the Russell 2000 gained approximately 1%, with the yield on the 10-year Treasury dropping 23 basis points to 4.18%, a decline of more than 5% for the week.

November included the release of strong economic data. The economic data included the lowest level of weekly initial jobless claims in seven months, a PCE report that showed in-line inflation, and third-quarter GDP registered at a healthy +2.8% annualized rate. There was some concern over President-elect Donald Trump’s proposed tariff policies, in which he said he would levy a 25% tax on all goods coming from Mexico and Canada and charge an additional 10% tax on products from China above any new tariffs. Thus far, traders have restrained themselves from reacting to those prospective policies that most economists suggest could reignite inflationary pressures.

Regardless of the volatility of the data, positive real wage growth has supported consumers and the overall U.S. economy. The steadiness of the economic data and resilient corporate profits support a good backdrop for investments. While we can’t say specifically that the markets will end the year higher than the levels of early December, we encourage investors to remain invested.