Santa Claus Rally Continues Despite Mid-Week Breather

The Dow continued to nab record closes this week

Deputy Editor
Dec 22, 2023 at 11:30 AM
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Wall Street's frenzied upturn continued into this week, with both the Dow Jones Industrial Average (DJIA) and Nasdaq Composite (IXIC) notching nine-straight daily wins on Tuesday. The Dow also marked its fifth-straight record close, while the S&P 500 Index (SPX) moved in on its January 2022 record highs. Though stocks finally took a breather next session, the Santa Claus rally picked right back up the following day.

Meanwhile, Treasury yields took a tumble this week, with the 10-year rate dropping to its lowest level since July, while the 2-year rate fell to its lowest since early June. In terms of economic data, this week saw better-than-expected housing starts data, while initial claims and third-quarter gross domestic product (GDP) both came in below economists' expectations. 

M&A's and Other News

Steel saw a huge merger this week, after news that Japan-based Nippon Steel is buying United States Steel Corporation (X) for $14.9 billion, sending X shares flying. Christmas came early for Bristol-Myers Squibb (BMY) as well, as the biopharmaceutical name is acquiring Karuna (KRTX) for $14 billion. Following two years of antitrust battles, after Illumina (ILMN) reacquired Grail in 2021, the company is now selling cancer diagnostic test maker. Wells Fargo upgraded Paramount (PARA) on m&a potential in 2024, and shortly after, the reports came that the company is in talks with Warner Bros (WBD). Elsewhere, Affirm (AFRM) is expanding its "buy now, pay later" services at Walmart, while options traders got ahead of Super Micro Computer's (SMCI) deal with Intel (INTC). 

Analyst Notes This Week 

Coinbase received a sparkly bull note this week, with JMP Securities calling it the "Amazon of Crypto." Jefferies became bullish on the solar sector this week, though Sunnova (NOVA) sat out the tailwinds. Fellow alternative energy name Plug Power (PLUG), meanwhile, was downgraded on concerns surrounding the company's liquidity. Plus, Amgen (AMGN) received quite a bit of praise from BMO, while Wedbush chimed in on Cava (CAVA) as well as several other restaurant names. Lowe's (LOW), on the other hand, was downgraded heading into the new year. 

2023 Comes to a Close

Next week is sparse in terms of economic data, though there will be plenty of end-of-the-year statistics to unpack, especially after the market's recent run. The latest Fed decision injected plenty of positivity into the market. Here are some sentiment indicators to watch heading into the near year, per Schaeffer's Senior V.P. of Research Todd Salamone. In the meantime, check out what happens in Nasdaq-100 Index (NDX) shakeups, according to Schaeffer's Senior Quantitative Analyst Rocky White. 


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