Investors will continue to closely monitor the Santa surge in the stock market. If prices rise during this time, five days following Christmas till two days into the following year, it is referred to as the Santa Rally. However, on account of a deferred Christmas holiday, the US stock market is closed on December 26. Due to the federal holiday for Christmas, the New York Stock Exchange and Nasdaq Stock Market will be closed on Monday. Boxing Day, which always falls on December 26, is a public holiday in the United Kingdom and its former colonies Canada, Australia, Hong Kong, and South Africa. Many global stock and bond markets are closed today.

The NYSE and Nasdaq stock markets will open on Tuesday, December 27, and may set the tone for the markets before entering 2023. Going forward, the focus will also be on corporate earnings. The impact of rate hikes, consumer demand, and rising input costs will throw light on the margins of companies reflecting in the stock prices in 2023.

Markets may not run away quickly until it is clear that inflation has calmed down. Investors worry that excessive tightening by central banks throughout the world could push the economy into a recession.

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U.S. stocks ended last week higher as markets absorbed a slew of economic data, capping off a turbulent week marked by uncertainty over the central bank’s monetary policy and the possibility of an economic slump in 2023. The Dow Jones gained 0.53%, S&P 500 added 0.59%, while the Nasdaq advanced 0.21%. For the week, the S&P 500 booked a weekly loss of 0.2%, while the Nasdaq recorded a decline of 1.94%. The Dow was the outperformer this week, logging a weekly gain of 0.86%.

In November, the Personal Consumption Expenditures price index increased 5.5% YoY, which was less than the 6.1% increase in October. The core PCE, which excludes volatile food and energy prices, increased 4.7% from a year ago last month. “The PCE data implies that higher interest rates, inflation and uncertainty about the economy have prompted caution at the cash register. This trend may help Americans improve their financial health and spending power, which over the long term is positive because consumption represents approximately 70% of U.S. GDP. The minimal increase in spending is also encouraging for the inflation outlook because it shows that higher interest rates are helping to curtail demand,” says José Torres, Senior Economist, Interactive Brokers.

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