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Quiet But Positive Christmas Eve Session

Jim Giaquinto
·4 min read

That’s pretty much what you’d expect for a Christmas Eve in the market, namely thin volume and little movement.

However, the little movement that we did get was to the upside!

Remember the Christmas Eve of 2018? Otherwise known as the worst Christmas Eve in market history?

Each of the major indices plunged well over 2% amid the trade dispute with China, a partial government shutdown and an overall un-festive mood for stocks. And that was without a pandemic!

Thankfully, this year was much more ordinary.  

The S&P goes into Christmas above 3700 after rising 0.35% to 3703.06. Meanwhile, the NASDAQ advanced 0.26% (or about 33 points) to 12,804.73 and the Dow moved forward 0.23% (or around 70 points) to 30,199.87.

For this short, three-and-a-half day week, the NASDAQ was up 0.4%, the Dow was up 0.1% (or approximately 20 points) and the S&P slipped 0.2% (or a little more than 6 points).

There were a couple big stories on Thursday, including Alibaba (BABA) plunging more than 13% amid a regulatory probe by the Chinese government. And there’s finally a Brexit deal in Europe.

Here at home, though, the major news is about a stimulus deal in limbo after President Trump trashed it as “wasteful”. He also wanted the stimulus checks bumped way up to $2000 from $600. There was an attempt to pass such a measure today, but it was blocked.

The market isn’t too concerned at the moment, especially since a veto would likely be overridden. And the President could always just sign the bill despite his criticisms. However, the longer this drags out, the more it will weigh on investors' nerves.

We’re also wondering if there’s going to be a Santa Claus Rally. The NASDAQ is up more than 40% year to date! And the S&P is up 14.6% while the Dow has advanced 5.8%. So we really don’t need such a rally to have an amazing performance during an unprecedented year.

Of course, if the jolly big guy wants to offer us one... we’ll certainly take it!

Today's Portfolio Highlights:

Counterstrike: "Next week will give us a holiday shortened week again, with Friday being closed for New Years Day. It should be an active week as money managers look to clean up their portfolios and prepare for 2021.

"We continue to see froth and I would like a pullback for the overall market. It seems any stock that gets involved in EV doubles in a few days. While we should understand that the world is headed towards electric cars, these moves in equities shouldn't be viewed this as rational or healthy."
-- Jeremy Mullin, who had a top performer today with Stamps.com (STMP) rising 2.9%.

Value Investor: "This year, however, the Santa Claus Rally period feels a little more dubious than normal. Normally, all the business in Washington, and even on Wall Street, has been wrapped up by Christmas. People go on vacation until the new year.

"But now we have uncertainty due to the President's threatened veto of the COVID aid package which is also tied in with the spending bill. The federal government could shut down as soon as Tuesday if the spending bill isn't signed.

"It's a mess and Wall Street hates uncertainty.

"The only good news is that Wall Street has mostly been ignoring Washington for the last few months and has been focusing on the vaccine rollout. It's possible we see the same thing happen during the Santa Claus Rally period.

"Either way, be prepared for volatility."
-- Tracey Ryniec in yesterday's commentary.

Have a Merry Christmas and a Great Weekend!
Jim Giaquinto

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