fbpx

November to remember

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

· S&P 500 up 8.9%, boosted by lower bond yields

  • December strong for equities

S&P 500 Rally

November has historically been a robust month for equity returns, and this trend continued impressively this year; the index soared by 8.9%, marking its most remarkable performance since 1980, driven by a few major catalysts.

Better-than-expected economic data, lower yields, and tumbling oil prices all helped renew optimism that the Fed is done with its rake hiking campaign.

This renewed sense of optimism triggered increased investment activities, mirrored in the robust performance of the S&P 500, which now stands just 5% shy of its record high of 4796, achieved on January 3rd, 2022.

A graph with numbers and a bar

Description automatically generated

Goldilocks

Robust US Economic data points out that markets expect a soft landing for the world’s largest and most critical economy.

So far, Mr. Powell has been able to slay the inflation beast without serious growth scares or breaking something in the economy.

Price data showed that the various measure of inflation continues their decent, moving closer but still far from the 2% target by the Fed.

Third-quarter GDP results were revised upward to 5.2% (from 4.9%) on the back of strong government spending but partly offset by consumer spending.

Those positive macro surprises did not go unnoticed by bond traders and were immediately reflected in the lower bond yields.

The peak in bond yields coincided with the start of the S&P 500 November rally.

A graph showing the different rates

Description automatically generated with medium confidence

Lower costs of capital boosted company valuations.

On top of that, oil prices dropped, alleviating some stagflation fears. This decline translated into lower energy costs for consumers, giving them more spending power.

Currently, market participants expect rates not only to peak but also to be cut next year. The message was reiterated by legendary investor Bill Ackman, who bets that rates will be lowered as soon as Q1 2024.

Option traders do not see significant risks ahead. The VIX index, known as the fear index, dropped to its lowest levels in nearly 4 years as the move into risk-on assets lifted most asset classes.

It’s a pivotal point as the start of the cutting cycle marks has translated into strong returns for equities in the preceding months.

However, this rally is causing some valuation scares, including overconcentration fears, as few tech names, driven by the AI hype train, have delivered virtually all the S&P 500 year-to-date returns.

December rally?

Investors will monitor Powell on Dec 13th for a better sense of the policy path as the Fed is expected to leave rates unchanged on its last meeting of the year.

December is one of the best months, historically. In no other month stocks have a higher chance (74% of the time) to finish higher than the prior month.

A graph with numbers and a number of bars

Description automatically generated with medium confidence

A Santa rally is not out of the question, especially if the Goldilocks scenarios continue and investors’ optimism keeps gripping the markets.

Investors can long the S&P 500 using our 3x US 500 , 5x US 500

Alternatively, they can short the S&P 500 using our -3x US 500

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Related Posts

Gold is in a healthy correction and higher price levels are likely by year end.
Gold is in a healthy correction and higher price levels are likely by year end.
Violeta-540x540-1.jpg
Violeta Todorova
Gold is in a healthy correction and higher price levels are likely by year end.
Gold is in a healthy correction and higher price levels are likely by year end.
Gold is in a healthy correction and higher price levels are likely by year end.
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Violeta-540x540-1.jpg
Boyan Girginov
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Violeta-540x540-1.jpg
Sandeep Rao
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Violeta-540x540-1.jpg
Violeta Todorova
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
Violeta-540x540-1.jpg
Boyan Girginov
What is an ETF? How does an ETF work? Key characteristics of ETFs.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
Violeta-540x540-1.jpg
Pawel Uchman
A quick primer on leveraged instruments available in markets today.
A quick primer on leveraged instruments available in markets today.
Violeta-540x540-1.jpg
Sandeep Rao
A quick primer on leveraged instruments available in markets today.
A quick primer on leveraged instruments available in markets today.
A quick primer on leveraged instruments available in markets today.

Violeta Todorova

Senior Research

Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.

Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.

Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.

Julian Manoilov

Marketing Lead

Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.

Oktay Kavrak

Head of Communications and Strategy

Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.

È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.

Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.

Sandeep Rao

Research
Sandeep è entrato a far parte di Leverage Shares nel settembre 2020. È responsabile della ricerca sulle linee di prodotto esistenti e nuove, su asset class e strategie, con particolare riguardo all’analisi degli eventi attuali ed i loro sviluppi. Sandeep ha una lunga esperienza nei mercati finanziari. Iniziata in un hedge fund di Chicago come ingegnere finanziario, la sua carriera è proseguita in numerose società ed organizzazioni, nel corso di 8 anni – da Barclays (Capital’s Prime Services Division) al più recente Index Research Team di Nasdaq. Sandeep detiene un M.S. in Finanza ed un MBA all’Illinois Institute of Technology di Chicago.

Gold Retreats But Rally is Not Over

Copper Ready to Explode

Q2 2024 Market Outlook: Rocky Road Ahead

What is an ETF? (Exchange Traded Fund)

How Do Leverage Shares ETPs Trade in Multiple Currencies

Currency Impact