2023-12-15 11:31:51
Spurred by the Federal Reserve’s interest rate cuts and expectations of a soft landing for the economy, the three major U.S. stock indexes collectively closed higher for two days in a row. On Thursday (14th), the Dow Jones Industrial Average hit new intraday and closing highs. (JOHANNES EISELE/AFP/Getty Images)
[The Epoch Times, December 15, 2023](Epoch Times reporter Li Yang reported) Inspired by the Federal Reserve’s interest rate cuts and expectations of a soft landing for the economy, the three major U.S. stock indexes collectively closed higher for two consecutive days. On Thursday (14th), the Dow Jones Industrial Average hit new intraday and closing highs. Some analysts say that the central bank has turned dovish, and it seems likely to usher in a “Christmas market” at the end of the year.
The Federal Reserve (Fed) announced on Wednesday that interest rates will be on hold once more and that it may cut interest rates three times in 2024. The market responded enthusiastically. U.S. stocks surged in response, with the Dow Jones Industrial Average rising more than 500 points that day and closing at a record high; the S&P 500 Index and the Nasdaq Composite Index hit new highs in the past two years. The 10-year U.S. Treasury yield fell below 4% for the first time since early August.
Wall Street stocks extended Wednesday’s gains Thursday. The three major stock indexes collectively closed higher for six consecutive trading days, but the gains were not as high as Wednesday.
As of Thursday’s close, the Dow Jones Industrial Average rose 158.11 points, or 0.43%, to close at 37248.35 points; the S&P 500 Index rose 12.46 points, or 0.26%, to 4719.55 points; the Nasdaq Index rose 27.60 points, The increase was 0.19%, reported at 14761.56 points. The Philadelphia Semiconductor Index also rose by 106.52 points, or 2.67%, to 4097.47 points.
Federal Reserve Chairman Jerome Powell changed his previous “hawkish” attitude at the last interest rate meeting this year, saying that the historic monetary policy tightening cycle may be over, and discussions on interest rate cuts have begun to “come into view.”
The Fed also released a “dot plot” of future interest rates, anticipating a 75 basis point rate cut in 2024, higher than its September forecast.
Investors cheered the central bank’s dovish stance. U.S. stocks closed higher for two consecutive days, and this optimism also extended to Asian stock markets. In addition to mainland and Japanese stocks, Hong Kong, Sydney, Seoul, Taipei and other stock markets all closed higher.
Some market participants commented that the chairman of the Federal Reserve is acting as “Santa Claus” and giving a big gift to U.S. stocks in advance.
Gina Bolvin, president of BOLVIN Wealth Management Group, said that the Federal Reserve has given the market a holiday gift in advance and is moving in the direction of the market, and the “Christmas market” is likely to continue.
The Santa Claus rally is one of the many seasonal effects of the U.S. stock market. It refers to the period between the last five trading days of December each year and the first two trading days of the next year. U.S. stocks usually experience a wave of rising prices.
Investors are looking forward to whether “Santa Claus” will visit the U.S. stock market this year. For them, what is more important is if the “Christmas market” appears, or it is a sign of good performance in the stock market in the next year.
The S&P 500 Index rose 8.92% in November, marking its largest monthly gain since July 2022.
Scott Wren, senior global market strategist at Wells Fargo Investment Institute, believes that the rise in U.S. stocks may be related to “short covering.” Judging from seasonal factors, the rally in U.S. stocks is expected to be further expanded. Because in the eyes of investors, November and December have historically been the two best months for U.S. stocks.
However, some analysts believe that investors who are bullish on the stock market should not rush to party yet.
Frank Value Fund portfolio manager Brian Frank is cautious regarding whether U.S. stocks can continue to rise.
Kathryn Rooney Vera, market strategist at StoneX Group, is also worried regarding whether bulls in U.S. stocks can continue because the risk of economic recession has not yet been completely eliminated.
Editor in charge: Li Tongde#
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