Santa rally crashed. Sell TSLA, BX, PYPL now?
Crashing Santa Rally?
Santa Rally came to a splutter on Wed, 03 Jan 2024, last day of the measuring period — 22 Dec to 03 Jan. (see above)
Hmmm, this does not bode well for US market, I say.
Of the 2 catalysts that were supposed to help US market rally, one of them is not doing its job.
For November 2023, there were 8.79 million jobs opening, a slight decrease from revised October 2023 data of 8.852 million.
Actual jobs opening is also lower than Wall Street forecast of 8.85 million.
In fact, November’s data is the lowest since March 2021. reflecting a continued cooling in the labour market to end 2023.
The latest JOLTS data should be music to the Fed officials.
This is because it is another step toward “healthier” labour market conditions.
Incidentally, the November JOLTs report also showed the quits rate (sign of confidence among workers), fell to 2.2%, down -0.1% from October’s 2.3%. The latest quit rate is also the lowest level since September 2020.
The latest JOLTs report should help to reinforce the Fed to keep interest rate status quo in their coming January 2024 FOMC meeting.
FOMC minutes of meeting - sample.
What spooked US market ?
According to FOMC’s December 2023 minutes of meeting released, Fed members concluded that interest rate cuts of ¾ are likely by end 2024.
The team, however, stop short of confirming the time frame on when the cut might take place.
What tipped the market off was probably, the meeting summary noting a high level of uncertainty over how, or if, that will happen.
Earlier Wednesday, Richmond Fed President Thomas Barkin also socialized with media, expressing caution about policy, noting the number of risks inherent in trying to guide the economy to a soft landing.
This is definitely not what Wall Street was hoping to learn from the released minutes and reacted accordingly.
iCapital — Chief Investment strategist, Anastasia Amoroso, also reasoned that “You’ve got positioning, you’ve got sentiment, all of that is pretty stretched. And after a really strong finish to the year that we’ve had, we’re just due for some of the give back.”.
By the time market closed on Wednesday:
DJIA: -0.76% (-284.85 to 37,430.19).
S&P 500: : -0.80% (-38.02 to 4,704.81).
Nasdaq: -1.18% (-173.73 to 14,592.21). It’s holding the fort at its 21-day exponential moving average.
Santa rally - Best & Worst performing sector:
During santa rally (22 Dec to 03 Jan), the best and worst performing sectors are:
Top 3 worst performing sectors.
Consumer discretionary (retail) (-3.8%)
Technology (-3.3%).
Industrial (-1.1%)
Top 3 best performing sectors.
Healthcare (+3.1%)
Utilities (+2.8%).
Consumer staples (+2.2%).
As a logical investor, we should:
Find out which are the stocks that fared worst.
Next, take a decisive action on what to do with the stock/s.
One of the fastest way to find out is: (see below)
Look at the heat map of S&P 500 (by trading volume).
The legend (at top left corner) is a colour scale indicating from worst to best performing.
Top 3 stocks that fell most in the past 7 days are:
$Blackstone Group LP(BX)$ at -4.62%.
$PayPal(PYPL)$ at -4.6%.
$Tesla Motors(TSLA)$ at -4.1%.
Top 3 stocks that gain most in the past 7 days are:
$Suncor(SU)$ at +5.76%.
$Eli Lilly(LLY)$ at +4.31%.
Petroleo Brasileiro SA Petrobras ($PBR) at +3.59%
With all the information at your finger tips, do you know what action to take now ?
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Do you think US market will continue to consolidate in January 2024?
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