Market This Week: 12/26/2022 - 12/30/2022
A holiday-shortened trading week with the possibility of a Santa Claus rally
U.S. stocks ended the day higher on Friday because of news that consumer inflation continued to decline in November, with consumers anticipating that this trend will continue in the coming months. The Dow rose 0.9% for the week, but the Nasdaq fell 1.9%, and the S&P 500 fell 0.2% as investors were worried about Fed rate hikes and the prospect of a recession.
Even though U.S. markets will be closed on Monday due to the holiday, next week might still be interesting since some investors may be hoping for a "Santa Claus surge" to end the year on a high note. The S&P CoreLogic Case-Shiller National Home Price Index and the October House Price Index (HPI) for Freddie Mac will be released on Tuesday, providing the most recent information on home price trends. The National Association of Realtors (NAR) will release its pending home sales statistics for November on Wednesday. On Friday, the Chicago Purchasing Managers' Index (PMI) for December is coming, and it will provide us with an update on how well the American manufacturing sector is doing.
Markets
Source: Investopedia
Key Takeaways
On Monday, U.S. markets will be closed.
A "Santa Claus rally" might help the markets.
On Tuesday, S&P Global will release its Case-Shiller National Home Price Index.
On Wednesday, the NAR releases a report on pending home sales.
The ISM will announce its most recent Chicago PMI on Friday.
Events Calendar
Monday, December 26
U.S. Markets Closed for Holiday
Tuesday, December 27
Wednesday, December 28
Thursday, December 29
Friday, December 30
Recent Information on Home Prices
Next week, the most recent information on housing prices in the United States will be released. S&P Global, a provider of indexes, will release its October Case-Shiller National Home Price Index on Tuesday. Freddie Mac, a mortgage lender, will release its October House Price Index (HPI). The Case-Shiller Index, which tracks home values, is forecast to have decreased 1.2% in October, following a 1.5% dip in September, making it the fourth month in a row that prices have decreased. Prices likely slowed down even more annually, climbing by just 9.1% as opposed to a 10.4% growth in September. This would be the smallest yearly price growth rate in more than two years.
The National Association of Realtors (NAR) will publish information on pending home sales in November on Wednesday. Sales are expected to have decreased nearly 30% from a year ago, or 0.5%, in November. Due to the impact of low inventory, rising mortgage rates, deteriorating affordability, and expanding supply, pending house sales have decreased for 11 of the past 12 months.
Purchasing Managers' Index (PMI)
The Chicago Purchasing Managers' Index (PMI), which tracks manufacturing activity in the Midwest of the United States, will be released by the Institute for Supply Management (ISM) on Friday. After plummeting to 37.2 points in November from 45.2 points in October, the Chicago PMI probably fell even worse in December. The U.S. manufacturing sector has been hurt by the recent economic slowdown, and last month's PMI score was the lowest since June 2020. A reading of less than 50 denotes a decline in business activity.
Is a Santa Claus Rally Going to Happen?
Markets might benefit from a "Santa Claus rally," which refers to the tendency for the stock market to rise just before or after Christmas, even if there is no guarantee of this happening. Despite the fact that markets are now down for the month, December has historically been one of the best months of the year for American stocks, with the S&P 500 seeing an average gain of 1%. The Stock Trader's Almanac also states that throughout the same time frame, the S&P 500 has increased by an average of 1.3% on the final five trading days of December and the first two of January. Although there is no clear explanation for why equities tend to increase at the end of the year, several hypotheses contend that seasonal optimism, holiday shopping, and institutional investors closing their books may have all contributed to the trend.