The last trading week of the year has arrived, with the Federal Reserve finally raising rates by 25 basis points, and the S&P 500 is once again red for the year. Given the stunning selloff over the last two trading days with bears licking their chops for more, the question appears not to be anymore whether the S&P will close anywhere near the lofty targets set by analysts (and recently revised lower), but whether it will rally at all going into the new year… Commodities continue to be crushed, with crude oil, gold and natural gas all hovering at multi-year lows. The double whammy of lower oil and gas has stirred some consternation over producers’ debt issuances, causing tremors in the high-yield space to be felt as well.
Judging by the recent behavior of market participants during the last few selloffs, an oversold bounce looks in order this week, although whether it can be sustained remains to be seen (futures are currently up at the time of this writing). Volumes are typically thin at this time of year, bringing the corresponding caveats for traders. As always, trade well and stay disciplined. But more importantly, enjoy your holidays and spend time with the ones you love.
Merry Christmas and Happy New Year everyone!