Santa Rally may bring joy to investors as markets aim for strong end-of-year finish

By Newsdesk

December 05 2023
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Investors around the globe might be in for a wonderful holiday treat as the CEO of deVere Group, Nigel Green, forecasts a potential Santa Rally to propel markets further following a robust November performance.

Santa Rally may bring joy to investors as markets aim for strong end-of-year finish

Nigel Green, who is no stranger to making accurate market predictions as seen in his October forecast of November's gains, maintains a bullish stance as the year draws to a close.

It was in Wall Street where the S&P 500 saw a 8.9% rise last month, marking the second-best November since 1980, while the FTSE in London celebrated its best month of the year. Additionally, the MSCI world stock index also closed November with an almost 9% increase, witnessing its strongest performance since November 2020.

Following this impressive run, Nigel Green predicts that the momentum will not only persist but could even culminate in a Santa Rally. "After November's impressive run, we now expect the momentum to continue. It’s likely we’ll see markets experience a Santa Rally taking us to the end of 2023," he states with confidence.

This anticipated stocks surge is credited to a significant drop in bond yields, spurred by the growing consensus that leading central banks like the Federal Reserve, the Bank of England, and the European Central Bank may have reached a pause in their interest rate hikes.

Looking ahead, Green points out specific sectors that could emerge triumphant from the predicted rally: "Tech, renewable energy, and healthcare are sectors that could benefit from the expected surge, providing investors with opportunities for capital appreciation." He also emphasizes the crucial role of diversification in the face of shifting market conditions, advocating for a investment spread across various asset classes, geographies, and sectors to mitigate risk while maximizing potential growth opportunities.

Santa Rallies, the festive spikes in market activity observed during the holiday season, have long captured the attention of investors for their historical significance. Instances such as the 1991 rally, which was buoyed by a de-escalation in the Gulf War, and the late 2018 surge following encouraging trade talks between the U.S. and China, serve as reminders of the possibilities during these periods of optimism.

"The signals are for a Santa Rally as we expect the markets to have steadily more momentum to the end of 2023," concludes Nigel Green, suggesting that this holiday season may end on a financial high note for those invested in the market's continued success.

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