"Market Soars: S&P 500 Up 1% - Christmas Rally in Full Swing!"
Yesterday's Market Activity
The markets rebounded yesterday, recovering from the losses of the previous day.
The $S&P 500(.SPX)$ increased by 1%, nearing its record high, while the Dow Jones rose by 0.9%, and the $NASDAQ(.IXIC)$ gained 1.3%. This resurgence was widespread, with 459 S&P 500 stocks closing in positive territory.
Consumer discretionary (+1.44%) and health care (+1.20%) outperformed the broader market indices, while utilities (+0.13%) and energy (+0.39%) underperformed. Intel (+2.88%) and $Salesforce.com(CRM)$ (+2.69%) led the Dow (+0.87%) higher; Cisco Systems (-0.20%) and $Apple(AAPL)$ (-0.08%) were the index's worst performers.
XLC
The bullish trend continued, indicating sustained strength in the Christmas rally. Economic data for the day included the Bureau of Economic Analysis' third and final estimate of U.S. GDP for the third quarter, showing the economy expanding at an annual rate of 4.9%.
GDP
Key Events of the Week
Throughout the week, several economic releases have shaped the news.
The U.S. economic growth, although slightly down from the second estimate, remains robust at 4.9% in the third quarter.
Labor market indicators, with a slight increase in jobless claims to 205,000, suggest robust health but with less exuberance than before.
Equities resumed their year-end rally, with varied performances between large and small caps and sectors such as discretionary consumer spending and healthcare outperforming.
Market Scenario
The current market is characterized by a recovery after the recent pause, showing signs of positive momentum.
Treasury yields, which had surged until the end of October, have retraced, returning to around 3.8%, close to the starting level of the year.
US10Y
Investors appear to be reacting positively to economic data, including solid third-quarter growth and a healthy job market.
Concerns about a recession, prevalent a year ago, seem to have dissipated.
However, the market remains attentive to key indicators, especially the Personal Consumption Expenditures (PCE) index, expected to show an annual core inflation of 3.3%. This reading, though slightly down from October, remains above the Federal Reserve's 2% target.
Market reaction to inflation data could influence expectations regarding potential future Fed rate cuts.
With trading volumes thinning ahead of the extended Christmas weekend, caution is advised, and liquidity may be limited.
Elon Musk's comments highlighting regulatory challenges for listed companies and criticizing market indexing add an additional layer to market considerations. $Tesla Motors(TSLA)$
In summary, while the market continues its rally, investors remain watchful of economic indicators and key players' comments.
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