The Santa Claus rally period is poised to continue on a positive note, with index futures pointing to a modestly higher opening on Tuesday. The market was closed on Monday for the Christmas holiday. Extended slide in bond yields, M&A news flow, and positive expectations concerning monetary policy could keep the momentum going for the market. A duo of house price data due for the day will unlikely create much ripples in the market.

Cues From Past Week's Trading:

All three major averages are trading just shy of their two-year highs.

US Index Performance In Week Ended Dec. 22

Analyst Color:

”The soft landing narrative is fully in charge,” said fund manager Louis Navellier. The economy remains strong while inflation keeps trending down, and the market breadth continues to improve, with the Russell leading and the Magnificent 7 no longer steering the boat, he said.

”It remains likely that we will end the year at highs,” the fund manager said. ”While valuations seem rich, we are looking at not only an election year in the US but in 80 countries around the world in ’24, where the incumbents will be pulling strings to boost their economies,’ he added.

Navellier said that AI cost savings potential will likely be seen as a very real technology that will start soon and ramp up for years.

Futures Today

Futures Performance On Tuesday

Upcoming Economic Data:

The economic calendar of the holiday-shortened week is fairly light. The only notable events of the week are the weekly jobless claims data, a trio of housing market readings, and a regional manufacturing survey.

Tuesday, the Chicago Fed is due to release its national activity index for November at 8:30 a.m. ET. The index was at a negative 0.49 in October.

The Federal House Finance Agency’s house price index for October will be released at 9 a.m. ET. The index is expected to rise 0.5% month-over-month, slightly slower than the 0.6% increase in September.

S&P/Case-Shiller is due to release its 20-city composite house price index at 9 a.m. ET. Economists, on average, expect the seasonally unadjusted index to climb 5% year-over-year compared to a 3.9% increase in September.

The Treasury is scheduled to auction three- and six-month bills at 11:30 a.m. ET and 52-week bills as well as two-year notes at 1:30 p.m. ET.

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Stocks In Focus:

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures fell 0.18% to $73.43 in early European session on Tuesday after they advanced roughly 3% in the week ended Dec. 22. The past week’s gain can be traced back to supply concerns after Red Sea attacks forced ships transporting oil to take a longer route.

The benchmark 10-year Treasury note fell 0.022 percentage points to 3.886% on Thursday.

In Asia, the Hong Kong and Chinese markets fell sharply, led lower by technology and real estate stocks, while most other major markets that were open for trading ended modestly higher. The New Zealand and Australian markets remained closed for the Boxing Day holiday.

Most major European stocks also remained closed for Boxing Day.

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