As of December 1, the S&P 500 is holding near all-time highs: after a strong November and a powerful push during Thanksgiving week, the medium-term trend remains bullish. At the same time, the backdrop is not entirely risk-free: it’s unclear how overheated the tech sector is, bond yields are creeping higher again, and geopolitics keeps adding nerves.
The key drivers for December are Fed rate-cut expectations and the classic Santa Claus rally. Historically, the window of “the last 5 trading days of December + the first 2 of January” has delivered an average gain of about +1.3% for the S&P 500 in 79% of cases. Optimists like Yardeni and JPMorgan are already sketching targets around 7,000 in the near term and up to 8,000 by 2026. As of December 1, the Fed is also ending QT — another important signal. Fed officials are softening their rhetoric in unison: we increasingly hear calls for easing against the backdrop of a weakening labor market and a slowing economy.
Taken together, this lays out a default bullish scenario: as long as the Fed is drifting toward easing, seasonality is a tailwind, and there are no serious signs of a trend break in the index.... Show More
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