The final trading month of 2024 is set to kick off with a bang as investors brace themselves for what could potentially be a record-breaking year in the stock market. With stocks hovering around all-time highs, the stage is set for a strong finish to what has already been a stellar year for equities.
According to industry experts like Sam Stovall, chief investment strategist at CFRA Research, December is historically one of the strongest months for the S & P 500, with the index averaging a 1.6% gain over the past several decades. With the S & P 500 already up 26% for the year, a typical December rally could propel 2024 into the ranks of the best years in history.
However, investors will have to navigate a slew of economic data and uncertainty surrounding the incoming administration’s policies in the coming month. While the market may seem expensive and sentiment frothy, many investors remain optimistic due to a strong macroeconomic backdrop and robust earnings growth forecasts.
The Dow Jones Industrial Average recently surpassed 44,000 for the first time, while the S & P 500 breached the 6,000 mark, signaling the market’s bullish momentum. All three major averages are less than 1% away from their record highs, underscoring the optimism among investors.
Looking ahead, the November jobs report scheduled for next Friday will be a key event for investors as they assess the health of the labor market. Expectations are high for solid job growth, which could influence the Federal Reserve’s decision on interest rates at its upcoming meeting. Markets are currently pricing in a 67% chance of a quarter-point rate cut in December, based on the CME FedWatch Tool.
In addition to economic data, next week will also see earnings reports from companies like Salesforce, Dollar General, and Dollar Tree, providing further insight into the state of the economy and corporate performance.
Overall, the stage is set for an eventful month in the markets, with investors eyeing potential gains while remaining cautious of market valuations and economic headwinds. As the year draws to a close, all eyes will be on the December rally to see if 2024 truly makes history as one of the best years for stocks.
