Monday's Market Minute: Santa Claus Rally

Stocks posted fresh record highs on Friday as they continued to rally on the back of an easing of geopolitical risks. The S&P 500 was up more than 1.5% last week and posted its fourth consecutive weekly gain. The benchmark is up 28.5% for 2019 while the tech-heavy Nasdaq Composite is up 34.5%.

The old adage of a ‘Santa Claus Rally’ looks to be in effect but is more based on the economic and geopolitical climate than the time of year. The phase one trade deal confirmation, stable economic data, and a dovish Fed have contributed to the strong equity markets. Stocks are modestly higher today to kick off the holiday-shortened week for markets. Equity markets close at 1 PM ET on Tuesday and re-open on Thursday the 26th for regular hours.

A report from China’s finance minister stated that they will lower import tariffs on over 850 products ranging from semiconductors, avocados, and frozen pork, starting January 1st. Unlike last December’s spike in volatility as stock markets sank, this year has seen low uncertainty as equities grind higher. We should expect to see falling volumes this week, but that doesn’t mean volatility is certain to remain low as headline risks could easily pop up at any moment.

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