The Year in Charts: The Market Environment in 2024

Jeffrey Buchbinder:

Hello everyone and welcome to LPL Market Signals. Jeff Buchbinder here, your host for this week with my friend and colleague Adam Turnquist. It is a special holiday week edition of Market Signals. So Adam, with your help, we're going to talk about some of the most important charts of 2024. So how are you today? Thanks for joining.

Adam Turnquist:

I'm good riding a Vikings win, a fantasy football win, and we're talking charts today. It was pretty hard to narrow down seven charts for me. As you know, you've seen some of my other presentations. They get a little chart heavy, but we got it down to seven really interesting charts for today so looking forward to discussing those with you.

Jeffrey Buchbinder:

Yeah, if you ever want to do like a top 50 chart podcast, just let me know and I'll make sure I find somebody else to host that week.

Jeffrey Buchbinder:

No, just kidding. I love each and every one of your charts just like my own children, no matter how many there are. So here's our agenda for this week. So market recap of course, as always. We've talked a little bit about the Fed and the hawkishness, what that meant for stocks last week and going forward. But of course the majority of the presentation will be about the year in charts. So thanks Adam for narrowing it down to seven. We'll call it the lucky number seven. Although I guess we're not counting just a general performance chart upfront. So you want to do seven, it's lucky. And then you know, the week ahead is going to be very, very short. It's a holiday shortened week of course. There's not much meaningful data. So let's get right into it.

Jeffrey Buchbinder:

I mean, of course, you know, a lot of red last week, right? We had the S&P down 2% on the week. Similar declines for the Dow, the Nasdaq. The Russell 2000 was an outlier to the downside, down over 4%. So clearly it was a risk-off week and you'd expect small caps to struggle in that environment. Add to that, it was a rising yields week, so that certainly made it tough on small caps. So Adam, your take on the you know, the sector performance last week, I mean, I noticed that, you know, it was a tough week for energy on the you know, the dip in oil prices. Anything else stand out to you in terms of the sector mix?

Adam Turnquist:

I think just the degree of selling pressure across the sectors. Everyone was talking about breadth last week as a technician. I don't remember ever seeing headlines about market breadth at that level. As of last week, we had 14 days of negative breadth for the S&P 500, so the worst breadth of the year. On Wednesday, we had that big relief rally on Friday. That was the best breadth that we've seen in terms of advancers first decliners. But overall, the trend there lower and lower participation in this latest, like higher few hiding places last week, as you can see really across the 11 S&P sectors. Energy leading losses with crude oil really going nowhere fast. Kind of just stuck down around $70 a barrel holding above support, but still in a downtrend. So it was certainly a wild week for markets, not only in equities, but also in fixed income, as you mentioned with yields moving notably higher.

Jeffrey Buchbinder:

That's a, I mean, you're right, all sectors were down. It was board based, but you had a pretty big discrepancy between, you know, the winners, mainly tech, down less than 1%, and then energy, down over five. You ended up with another growth-led week. Growth outperformed pretty meaningfully as it has for the last three months, year to date and for the trailing one year. And I think another story, and again, this was about Fed hawkishness, right, with the Fed meeting. That hawkishness combined with dovishness out of the Bank of Japan led to a strong dollar. And when you have a strong dollar, it's very difficult for international equities to keep up with U.S. equities or it's difficult for them to fall less than U.S. equities. So indeed, we saw for U.S. base investors, the the E Fen EM Index did lag the S&P 500.

Jeffrey Buchbinder:

So turning to the bond market you know, yields are up. In fact, yields, we're up over 40 basis points in just nine trading days through last Thursday. So we've had a really big move in yields, kind of settling in the 4.50 range. So you see another down week for the Bloomberg Aggregate Bond Index, and you see the year to date returns for that index, only 1.3% positive. I mean, it's going to be hard to erode much more of that at this point, but certainly a frustrating year for the bond market, broadly speaking. Although certainly we had some winners with high yield this year as well as preferreds. Preferreds have been an area that we've liked all year and and continue to like among plus sectors for fixed income. How about commodities last week, Adam? Anything jump out at you there besides more weakness in crude?

Adam Turnquist:

The NAC gas story has been interesting. You can see there trading at 3.72 today, that's above the 2023 high. So technically that's a big breakout in NAC gas. There's still a lot of short positions in the futures market, so there's potential for a squeeze there higher. Part of that story has been due to just the colder weather living here in the Midwest. You look outside, we got a lot of snow last week, little bit colder temps. That's helping partially clear that supply demand story for natural gas.

Jeffrey Buchbinder:

Got some of that in the northeast too. I think we bottomed at five degrees overnight and got about five inches of snow here in the western suburbs of Boston. So yeah, that certainly can help natural gas, no doubt. So thanks for that, Adam. Let's keep rolling. I mean, I guess just in terms of what we like, we do like precious metals generally we do in the short-term, think the dollar is probably more likely to rise than than fall. And you know, generally speaking, we think commodities can be a decent place to be in 2025, as we wrote about in our 2025 Outlook, which we released a couple weeks ago. So let's do the S&P chart here, Adam, real quick before we get to your you know, seven key charts of the year. You know, we still got an uptrend, but you know, clearly we've had a little bit of technical damage.

Adam Turnquist:

Yeah, certainly last week testing the S&P 500. You can see on the top right there, it violating this shorter term uptrend. It did bounce back on Friday, what we call a bullish engulfing candlestick. So the entire trading range then calculates the prior days range. Usually it overlaps with a potential inflection point, but getting back above that 50 days was a good sign. Keep an eye on that level this week. In terms of support, we start breaking the 50 day or 5,860. That's that post-election day price gap for the S&P. You have to question if we're going to go retest the 5,700 support level, that would be one of the next major areas. And even the rising 200 day moving average not too far down from current levels around 5,526, that would be about a 10% correction. So nothing out of the ordinary in terms of a drawdown for the index.

Adam Turnquist:

And you can see when you look at the internals of the market, the damage that was done last week, that middle panel highlights the percentage of stocks above their 200 day moving average on the index. The low for the year was 63%. We have that green support line. You can see how that percentage had bounced off that level numerous times throughout the year. What changed last week, we put a new year to day low in the percentage of stocks above their 200 day moving average at 55%. So I'd consider that a yellow flag in terms of market breadth. If we start going below 50%, that would be the red flag. That would imply less than half the index in an uptrend. And then on the bottom panel, we're just highlighting the advancers versus decliners, that daily breadth metric down 14 days were, or negative breadth, meaning decliners, outpacing advancers. Of course we saw that flip on Friday with that relief rally. So that's another thing we'll be watching this week in terms just what's the rebound here in breadth as we get through this holiday shortened week?

Jeffrey Buchbinder:

Yeah, a lot of action late last week. You know, you had of course the hawkish Fed, which I mean, frankly, we think at this point expectations are probably pretty realistic for two cuts next year. Although maybe the market was a little surprised by the big increase in inflation expectations from the FOMC. Nonetheless, we got a good core PCE inflation number on Friday, and we averted the government shutdown. So, you know, generally there's a little bit of an upward bias here as we're recording this, it's Monday afternoon, December 23. So you know, I think looking forward, sure you've got a little bit of a, I don't know, chart test to pass here, I would say. But the fundamentals to us to look pretty good. We got through some of the big milestones of December and we'll probably just sort of drift through to into 2025 here. That's my best guess. So thanks for that, Adam. Let's go to the year of charts. The year in charts seven. I know it's hard, but you've narrowed this down to seven most important charts. We're really just trying to give you an overview of what happened in 2024, at least the most important developments. So why don't you walk through these, Adam, and then we'll just hit them one at a time.

Adam Turnquist:

All right. So we'll jump into the Magnificent Seven and just the performance, or I should say outperformance for that group of stocks this year, another year where mega-caps dominate. And then we'll look at large versus small. We've had a lot of excitement in small caps. If you go think back to December of last year, small caps rallied, everyone was making the call. It's going to be the year for small caps. We'll highlight the chart that suggests otherwise with large caps, really dominating one of the other areas at the sector level. Communication services outperforming this year. All 11 S&P sectors. I think a lot of people might be surprised by that when you look at just the focus on tech, volatility was low in 2024. We'll look at the VIX and just maybe a little bit of an outlook as we forecast for 2025 for volatility.

Adam Turnquist:

As we know, it tends to mean revert. So there's a little bit of a hint we could have a more normalized volatility year as we look ahead and then yields another one. That's this paradox with the Fed finally starting to cut interest rates in September, but yet here yields are higher. I have to remind my wife of that every time she asks about refinancing, when the Fed cuts, rates moving higher and I have to go through the whole explanation of the market is forward looking and has expectations. So I think that 10-year chart, a very interesting one this year. And then sentiment, we'll look at that through the conference board, but really a one-way street. Everyone seems to be kind of all in on equity markets. Last but not least, gold, precious metal here actually outperforming the S&P 500. Another one that I think surprises a lot of people when you think about the backdrop for gold, you have a higher dollar, you have rising real yields, but yet gold has had a pretty resilient run here in 2024.

Jeffrey Buchbinder:

Yeah, if you came up with the top surprises of the year charts, I think you'd probably have some of these same ones. So let's get into it. So you're setting, just to set this up, this is just a broad performance chart, so we're not counting this as one of our top seven. But it sure makes a point that you know, the mega-caps were the place to be.

Adam Turnquist:

Certainly, and this is an equal-weight Magnificent Seven index price returns. So we're not including any dividends or anything like that, up 72%. That compares to the equal-weight S&P index in copper, up 11.5%. Still a very good year for the equal-weight index, but you can just see how much outperformance there's been in those mega-cap names compared to even the cap-weighted S&P, up 24%. If you look at the contributions to returns this year of the mega-caps you include Broadcom because of that big rally we've had in Broadcom over the last couple weeks. They've contributed about 60% to the S&P five hundred's overall year to date return. I think Nvidia alone has added about 20% to the S&P 500, second to Apple contributing 8%. So it's really been a Nvidia world that we're living in this year and really helping drive that mega-cap space higher. So when you look at the weights of the Mag Seven as well, they're just under a third of the S&P so out kicking their coverage in terms of their contributions this year to the overall index.

Jeffrey Buchbinder:

Yeah, I think this is why you use technicals, right? People were calling for this rotation at the start of last year and we just didn't get it. You got a little bit of fits and starts we'll call it, but until the charts tell you that you're making a turn, we're not going to make the turn. So I congratulate you Adam, on helping us avoid that, that trap. So more on the Mag Seven theme. You can't talk about 2024 without talking about Mag Mag Seven strength. That bottom panel really shows how strong this segment of the market's been.

Adam Turnquist:

Yeah, certainly they've been a consistent leader really since the bull market began. And they got a little bit overbought if you flashback to the summer, you can see even on the top panel to Mag Seven index and accelerated rate of change. And it went into kind of this consolidation phase and there was a lot of questions about this big rotation. Is it time to go to small caps or value and move out of kind of the big tech trade? However, it ended up being just a consolidation. And that's technically what you see. A lot of times you have these outsized returns and an asset class, you consolidate, some of those gains are digested, you reset expectations and then you resume in the direction of the prior uptrend. And of course for the Mag Seven that's been higher, finally breaking out through those July highs. We were watching and waiting for that as technicians. And then we also got the breakout on that ratio chart. This is comparing the equal-weight Mag Seven to the equal weight S&P 500 also rallying to new high. So as we search for relative strength, this is really what you want to see breakout in absolute terms, breakout on a relative term as well. So pretty impressive rebound here or rally into year-end reasserting themselves as market leaders as we go into 2025,

Jeffrey Buchbinder:

Yeah, we do think you get a little bit of a slowdown in this outperformance in 2025 consistent with the earnings gap closing, right? So we're starting to get more earnings growth out of the rest of the market while the Mag Seven earnings growth is slowing. Another theme we talked about in the 2025 Outlook that, you know, performance should follow earnings over time. So maybe the Mag Seven outperforms again, but we certainly wouldn't expect it to be by quite this much. So you know, I feel like a lot of these charts, even though they're different, are tied to the same Mag Seven theme, Adam. So this is large over small.

Adam Turnquist:

Yeah, kind of a "follow the money" type of chart here. And these are more ratio charts that we use to identify where the relative strength is, where that trend is, how sustainable is that trend? The top panel is the large cap S&P 100. We're comparing it to the S&P small cap 600. This is the cap-weighted versions and we often get pushback. Well, it's just the large cap names or the mega-cap names really doing all the work. So we also included the equal-weight S&P 100 and the equal-weight S&P 600 chart on the bottom panel, just to give a little bit more apples to apples comparison. But you can see really throughout 2023, and again 2024, it has been large caps leading, that's exemplified by this ratio chart moving higher. And there's certainly been some tests along the way for these ratio charts.

Adam Turnquist:

You can see we talked about earlier, just that excitement going into 2024 with this big rally in small caps in December of last year. We bounced right off the lower end of that channel. Same thing in July. We had a big rally in small caps that was, you know, everyone was on TV talking about small cap leadership and why you should be in small caps. But again, you had large caps reassert themselves, same thing post-election rally in small caps. We've had a bounce right near that 200 day moving average lower-end of the channel. And again, not just on the cap-weighted, but also on an equal-weight basis. So for now, that's where the trend is telling us for next year, at least technically here, that large caps will likely continue to lead.

Jeffrey Buchbinder:

Yeah, you're getting better earnings growth at a large. Small caps are interest rate sensitive so we're in a period where we're digesting higher rates. And frankly we don't think we're going to get too much good news on the tax-cutting front over the next six months. So it's going to be a tough negotiation next year. And the tax cuts wouldn't come until 2026 anyway. So we think maybe market's getting a little too excited about overweighting small caps here. We're more of a cautious, neutral, waiting for a dip to potentially buy. So next up is comm services. This is been another winner for LPL Research actually in our Weekly Market Commentary in January on lpl.com. We're going to talk about what we got right and wrong in 2024. And this is certainly going to be on the right column because this has been a big winner really all year.

Adam Turnquist:

Yeah, it's been in a consistent rising price channel. As we highlight here for the sector coming out of this, what we call a head and shoulders bottom formation, you can kind of see the left shoulder, the head, right shoulder, and it's consistently been in an uptrend ever since breaking out. And when you look at it on a longer term basis, it might look a little bit stretched or overbought in the short-term, but longer-term here, it's just breaking out above the 2021 highs. So typically when you see these really important technical breakouts, momentum tends to continue. And that's our expectation for this trend to remain in that rising price channel. The other big story with communication services has been the relative breakout. It was basically consolidating for part of the summer springtime, you can see that in the middle panel versus the broader market. So holding up but not trending higher. And we've recently witnessed a breakout in that relative trend that suggests that this outperformance will likely continue at least technically and breadth. I know there's a lot of focus on the mega-cap components within the communication services, but it's not just those names that are doing all the heavy lifting. You can see on that bottom panel, over three quarters of the sector above their 200 day moving average. And I know Jeff, you like the earning story here as well. It's not just the technicals that look good.

Jeffrey Buchbinder:

Yeah, that's right. You've had a really good combination of reasonable evaluations and above market earnings growth in communication services pretty much all year. The big concern here is regulatory, right? With both Meta and Alphabet slash Google under some regulatory pressure. You know, there's been talk a lot lately about Google having to break up and things of that nature. So we'll see where all that goes. And by the way, there's also a positive, potential positive catalyst if TikTok is you know, banned or slowed in any way meaningful way that could actually benefit both Meta and Alphabet. So we'll follow those stories certainly, but right now if you just look at, you know, the pace of earnings growth along with valuations, the sector still looks good. Still like communication services. So Adam, it's been a pretty low volatility year. I mean this chart really puts that into perspective when you look at 2022, you know, one of the worst years we've experienced in decades. No more. There's not much red on this drawdown chart on the bottom half of this slide.

Adam Turnquist:

Yeah, so the top panels, the CBOE Volatility Index, basically the market's expectations for volatility over the next 30 days in the S&P 500. Higher means the expectations are for higher volatility. And then the bottom panel looks at the drawdown for the index as well. And what we witnessed this year has just been a very low-ball type of year. You can see that in the VIX trading well below its longer-term average of around 19 and a half. We had a couple big spikes, notably in August where we had maybe a little bit of a glitch with that 70, almost 70 reading intraday on the VIX. And then of course, last week's I think we had went up to 28 on the VIX, about a 74% move. Oftentimes you see that these big VIX spikes overlap with market bottoms. That was the case of course, in August. But as you look back to your point Jeff about 2022, very above average volatility and a pretty significant draw down there for the S&P 500 and what we know about volatility, it tends to mean revert. So we've gone from high vol to low vol and I think maybe next year we can expect more of a normalized type of volatility with the VIX trading, call it around 20 as things revert back to their longer-term average here.

Jeffrey Buchbinder:

Yeah, probably not another 2022. Maybe something that looks more like, you know, combination of 2023 and 2024. We expect more volatility, but you know, we're losing some of our potential catalysts for volatility in terms of the Fed, we think, and rates. We expect the Fed and rates to kind of cooperate and not be much of a catalyst necessarily in either direction next year. And that's going to leave, you know, geopolitics is certainly a catalyst for risk and potential selloffs. And then you know, like I mentioned before, the tax negotiations, policy, tariffs. All of that is you know, potentially a cocktail for some volatility. So, you know, we'll look at those areas very closely as we move through the year as potential opportunities to buy a dip. But for now you know, we think neutral is the place to be and you know, hopefully we get an opportunity to be more aggressive in early 2025. So talked a little bit about yields already, Adam. You know, I call this range bound, but I mean, actually, I mean, we have come down quite a bit from where we were, you know, 12, 15 months ago. It's a breakout, but it's, you know, there's, still higher levels of resistance if you go back. How do you interpret this recent move above the more recent highs?

Adam Turnquist:

So I think you have to frame it up from a time perspective. Longer-term, I think the heading here, range bound makes sense. We haven't broken out through those October 2023 highs nor right around 5%. But on a short-term basis, I do think there's risk to the upside here for 10-year yields. Technically we've reversed the downtrend. We're back above the 200 day moving average, and then last week's breakout above 4.50, that's the highs that you can see that resistance level that we highlighted there, that checks the box for a higher high. So part of the definition of an uptrend, higher highs, higher lows for yields now. Evidence is growing that there's a developing uptrend or a shorter-term uptrend here with implications that we could go retest the April highs around 4.74. I think that could put some pressure on equity markets if we get there.

Adam Turnquist:

Of course, if we clear 4.74 that could open the door for a retest of that 5% level, we saw back in again 2023. Take it one step at a time though with resistance. We're also kind of battling the gravitational pull from Fed interest rate cuts next year. So I think that could put a cap on where things are at. And then as we witnessed even last week with inflation data continuing to at least move in the right direction, I do think there's limited longer-term risk here for yields. But on the middle panel we highlighted the term premium, and this is something our Chief fixed income strategist has highlighted about the rise in term premium. And that's a model estimate of term premium as we don't really know the exact number, but when that's moving higher, that's the incremental yield you investors require for adding longer duration.

Adam Turnquist:

Part of that story on the term premium, of course, maybe it's due to rising deficits, what's going on in inflation, some of the break-even rates moving higher a little bit. What's been a little bit more notable just recently as well is just the city economic surprise index. So as that moves higher, that means the economy's coming in above analysts expectations moving lower, vice versa. And that's been the case over the last few weeks. You can see it dipping down to 10 coming from as high as 50 back in November. And that's been correlated to yields that that correlation starting to break down a little bit, suggesting this latest move in yields not really predicated on higher growth expectations, but maybe some more to do with inflation. Of course, the Fed talked a lot about that last week and then maybe some of the deficit tariff concerns, things like that. But for now, I think there's a little bit upside risk to call it 4.74 on the 10-year.

Jeffrey Buchbinder:

Yeah, as as our fixed income strategist, Lawrence Gillum's been talking about, we do have Treasury auctions that we're going to have to digest next year and we all know about the deficit spending, which is probably a big part of why yields have ticked up a little bit here lately. But on the inflation front and the growth front, we think we're going to get some help, right? In fact, our chief economist, Jeffrey Roach, thinks we're going to get a one handle on core PCE in the next like four months, we'll say, four or five months. And I mean that's a meaningful improvement from where we are right now. That should put some downward pressure on yields. And then, actually in the durable goods numbers today, we've got a little bit of a hint into slower growth ahead.

Jeffrey Buchbinder:

In the 2025 Outlook, we cite some reasons why we think consumer spending is going to slow, right? That can put some downward pressure on yields. And then lastly, if you get higher yields, they become more attractive to buyers pension funds, you know, foreign governments, et cetera. So we think we'll get enough support to keep yields kind of in this range. Yeah, maybe we test five, but you know, our year-end target is 3.75 to 4.25 for the end of 2025. We don't think we're going to stay up at those lofty levels if we get there. So couple more charts, Adam. This is a measure of consumer bullishness on stocks and it's pretty stretched.

Adam Turnquist:

Yeah, it's a little busy when I look at it again here. There's a lot going on here. Top panel S&P 500, the middle panel uses the conference boards data, basically the household survey looking at how many households expect stock prices to increase over the next 12 months. That is in blue. The orange is how many households expect stocks to decrease. And the bottom panel is the spread between those two. Just to give you some indication of the bulls versus bears here at the household level. And going into 2025, right now the consumers have never been this bullish on equity. So that is the highest reading. We had a 57 print in November. The data actually came out today, it moved down to 53. But historically, high sentiment or bullish sentiment for equity markets, and it's not just the conference board data you can look at. Even at the institutional level, the Bank of America Fund Manager Survey, one that's often cited record low levels of cash record, high positioning in U.S. equities. You can look at magazine covers like Barron's there, I think it was last week they talked about another 20% year and embrace the bubble, I think was the title used in that one. So there's a lot of signs of froth going into next year, and I think you have to look at that a little bit from a contrarian perspective as we move ahead with, especially with the rally that we witnessed in equity markets.

Jeffrey Buchbinder:

Yeah, the certainly some of this sentiment looks like it did in the late nineties. Of course, that rally went basically four years not just two, which is kinda where we are right now. So we'll see how long this run goes. But the re the stretch sentiment is certainly a key reason why we think we're going to get a pullback here. So I think this is your last one, last chart, Adam, this is gold. I mean, speaking of sentiment, there's been a lot of excitement in the gold trade this year, no doubt.

Adam Turnquist:

Yeah, an interesting one, especially as the backdrop we just highlighted with this extreme risk-on bullish sentiment. Gold often considered more of a safe haven, but actually outperforming the S&P 500 this year. And the story for gold started earlier when we finally broke out above 2,070. That's that red bar going across most of the screen. That was a record-high breakout. You can see how many tries it took gold to finally get through that level, and it's been really off to the races since we broke out in gold. And it's been an interesting backdrop when you think about gold rallying, I think up 27%, I think as of Friday, that's topping the S&P's return as of Friday as well. But you've had, again, rising yields, real yields as well. You've had a rising dollar that cleared 1.07 last week. That was notable, but yet gold's still trending higher here, retesting the lower end of that price channel.

Adam Turnquist:

And if you think about the catalyst behind why gold is moving higher against that backdrop, you've had record levels or near record levels of central bank buying as they diversify away from their dollar in terms of their reserves and add to gold positions. You've had a return of ETF demand coming in as I think fear of missing out started to play out in gold. So investors chasing this rally via physical gold ETF holdings and then just the geopolitical backdrop. We've had elevated geopolitical risk really throughout the year. That hasn't gone away. So I think that's also helped prop up gold here. And an area that we've liked. I think over the last, call it two years now with precious metals.

Jeffrey Buchbinder:

Yeah, gold's advance has been really impressive given that the dollar's been so strong because usually it moves in the opposite direction. I think you hit on it right there, which is the geopolitical risk premium that's still in markets. It's come off a little off the boil lately, and you can see that in this little bit of a pullback in gold. But yeah, still an area that to us makes sense to have a little bit of exposure as a potential volatility dampener or diversifier. So really nice looking momentum there in 2024, certainly from gold. So thanks for that whirlwind tour of charts of 2024, Adam. Of course, there are others that could have made this list if we went longer. But those were really great. Great job sort of summarizing the year.

Jeffrey Buchbinder:

So in terms of the holiday shortened week, there's really not a whole lot going on. So I mean, I did allude to the durable goods report. So you see here the orders were pretty weak today, you know, down 1.1% headline, which is quite a bit worse than expectations of down 0.3. And then if you exclude transportation down 0.1% versus expectations for a gain of 0.3. So orders is kind of forward-looking that, you know, those orders eventually turn into shipments, which is what goes into GDP. But you know, all indications are we're going to have a strong Q4. GDP is tracking to around 3%, so we'll have to wait until next year for the slowdown. But we do think it'll come, you know, not fall off a cliff, but you know, maybe go from three to two in terms of the growth rate. So other than that, I just think, I mean, it's about consumer expectations with the conference board, a little bit of housing data and claims, which matter now maybe more than they usually do. Anything else on your radar for this week? Adam?

Adam Turnquist:

Santa Claus rally period kicks off this week, actually tomorrow, so keep an eye on that if you're not familiar with it. It's the last five trading days of the year, plus the first two trading days of the new year. So officially that starts tomorrow when that period is positive, that tends to produce historically above average returns in the following year as of last year. For example, if Santa shows up, we get a positive Santa Claus rally period. The S&P higher just over 10% on average the following year, going back to 1950 when Santa doesn't show up. Average returns for the following year just over 4% with a much lower positivity rate. So let's hope Santa shows up this year.

Jeffrey Buchbinder:

All right, sounds good. Rooting for Santa. I think the fundamentals, the market backdrop, all supports just a little bit of a quiet drift up over the next I guess what, seven trading days, right? The Santa Claus rally is the first two trading days of 2025, right?

Adam Turnquist:

Yep.

Jeffrey Buchbinder:

Perfect. So there you go. So I think we'll go on end air. So thanks Adam for walking through the charts. Really great stuff. Thanks to all of you for listening. Thank you for listening throughout 2024. This isn't our last one of the year, Adam, and I'll be back next year or next week rather. And then we'll have the first Market Signals of 2025 the week after that, and we'll get back into our regular rotation. So everybody enjoy the holidays. Good luck with that last minute shopping and we'll see you next week. Take care everybody.

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