Santa Claus rally

Nikkei rose on upbeat global growth signals. European shares and commodities fall before the Fed two-day meeting. The consensus still seems to be in favor of January or March for the first taper.

December is a better trading month than the others and better known as “the Santa Claus rally”. The markets has a tendency to go up the last 10 trading days of the year. Will this tradition continue this year, or will the Fed keep the markets grounded?

The Dow has gained an average of 1,7% since it was created in 1896. It is rising 77% during this seven-trading session period in December. That is much better than the 0,2% average gain in all other seven-trading session periods of the calendar.

The Fed has said it won’t cut stimulus until it sees signs of sustainable economic recovery. Unemployment has since fallen to a five-year low and third-quarter economic growth was stronger than forecast.

Is the U.S economy strong enough to start tapering now in December 2013? The FED has said it won`t start the tapering before it sees signs of a sustainable economic recovery.

The unemployment rate is now 7,0%. This is the lowest level since november 2008. This is encouraging news for the 11 million Americans who remain unemployed. 2013 is on the way to be the best year for job creation since 2005.

The market has a long way to go before it is healed from the recession, but unfortunately the job market still has a long way to go until it’s entirely healed from the recession. The meeting starts tomorrow. Let`s wait and see…. Do you belive in Santa Claus?

News today: Core CPI at 8:30am.


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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