Santa Rally Stuck in the Chimney

Santa Rally sputters as markets struggle with bad breadth

Highlights

• Santa Rally sputters as markets struggle with bad breadth

• A “hawkish cut” is likely from the Fed today…

• … but that’s already priced in by bond markets

• The loonie hits a 4-year low and may be nearing a bottom

Key Takeaways

Market Focus Shifts to Fed's "Hawkish Cut"

• All eyes are on the Fed today. Look for a “hawkish cut” with the dot-plots being trimmed for 2025, but this is already fully priced into the bond market — which has also been undermined of late by concerns over Donald Trump’s trade and fiscal policies.

Trump Rally Fades as S&P 500 Stalls

• The complexion of the market is shifting. The S&P 500 is hardly above the November 11^th closing level (when it first pierced the 6,000 mark) so we may well be seeing the fading of the Trump rally. December has strong seasonal influences so this sputter of late comes as a big surprise.