By my record, you’d have to go all the way back to 2013 for the S&P 500 to observe such a winning streak. During that stretch, the index gained by “just” 6.8%. This time around the index is up a whopping 15.1% in those eight weeks, based on yesterday’s close. Talk about a Santa Claus rally, eh?
S&P 500 index weekly chart
We’re now roughly 1.6% away from a fresh record high in the S&P 500, with the Nasdaq also following a similar course although it is some 8.8% away from its own record high. As for the Dow, we’re already trading at record highs now after last week’s breakout move.
The fresh optimism in stocks comes as traders are piling on rate cut bets by major central banks. It means looser financial conditions and more liquidity flooding in. But are those rate cuts really a given? Now, that will be the major question for equities heading into Q1 2024.
If you ever need evidence that the stock market is not the economy, this is as good as any. And the same can be said even more so for European stocks.