Equity investor sentiment has been bullish for three-straight weeks, according to Deutsche Bank strategists
by Geoffrey Morgan
US equities gained for a third-straight session Monday but closed just shy of a record as a year-end rally is taking hold amid bullish positioning in tech stocks.
The S&P 500 Index ended the day 0.6% higher in a broad-based advance, which saw more than three stocks in the benchmark gain for every one that fell. The tech-heavy Nasdaq 100 and blue chip Dow Jones Industrial Average both rose 0.5%.
“The Santa Claus rally is building,” said Louis Navellier, chief investment officer at Navellier & Associates Inc. He said the market gains “would leave us ending the year at new highs.” The S&P 500 ended Monday 22 points shy of its recent record.
Energy and material stocks led the advance Monday and were two of the top-performing sectors in the market as oil prices gained after the US intensified a blockade of Venezuela’s crude exports. Gold and silver prices hit record highs.
Google-parent Alphabet Inc. struck a $4.75-billion deal to acquire Intersect Power LLC in a bid to get access to more electricity for its data centers.
“The tech sector looks poised to see a further rebound this week,” said Matt Maley, chief market strategist at Miller Tabak + Co LLC. He said that the size of a potential Santa Claus rally through the end of the year will be determined quickly “but as the markets become more and more ‘thin’ over the next few days, anything is possible.”
Equity investor sentiment has been bullish for three-straight weeks, according to Deutsche Bank strategists. Similarly, positioning in equities is rising and fund managers are maintaining record low levels of cash.
Paramount Skydance Corp. shares ended the day higher after billionaire Larry Ellison said he would guarantee $40.4 billion for the company’s bid for Warner Bros Discovery Inc. Paramount and Netflix Inc. are both pursuing an acquisition of Warner Bros.
Cleveland Federal Reserve President Beth Hammack said a pause in interest rate cuts is her base case for now. Fed Governor Stephen Miran said recent economic data should push central bankers in a more dovish direction. Traders will get additional clues on the future path of interest rates through the week, with GDP, industrial production and jobless claims all due over the next two days.
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