Stocks took off like Santa's Sleigh last week, as investors cheered the Fed's decision to begin tapering, yet doing so in such a small, innocuous way.
Hoping this apparent stock rally brings you some holiday joy. Everyone should be happy this time of year, correct? Check out this article on "How to be Happy," or share it with someone you know. Hoping it brings a smile.
The removal of the "tapering" uncertainty, the Fed's tacit display of economic confidence, and a busy week in M&A all provided a positive holiday surprise for investors, who responded enthusiastically.
Last week, Congress agreed to the first bipartisan budget deal in 27 years. The Senate passed it. The president will sign it into law. This helps to avoid another spring budget vortex. Further, it reduces the deficit over the next decade.
Politics is the art of the possible, which makes winning elections more important than defending principles. The new budget, however, serves to remind us that, on occasion, our politicians are capable of working together for the greater good. Click here.
Housing data was mixed. Jobless claims jumped. But, it's Christmas. So, let's leave it at that...
The Bottom Line
The anticipated Santa Clause Rally appears to be hitting its stride. Stocks are quietly climbing amidst low volume and little bad news.
Remember, dear friends, that the stock market climbed unabated for 18 years, from 1982 to 200. Then, markets consolidated, moving up, down and largely sideways for 12 years. Only recently have we elevated to new highs. This market longs to achieve new heights. Change its view. Gaze upon the valley below. So, let's ride this reindeer. While we can.
Major markets finished higher last week. The DJIA rose 2.96%, the S&P 500 gained 2.42%, and the Nasdaq advanced 2.59%. Small cap stocks soared 3.56%. And the 10-year Treasury bond yield gained 2 basis point to 2.89%. Gold lost $35.50 per ounce, or 2.87%.