Bullish forecast for 2025 with a base case of 8-12% and finest case of 12-20%.
This week’s softer inflation readings from PPI and CPI eliminated a number of the market’s fears that sticky inflation would trigger the Fed to hike charges. The ten-12 months yield could have peaked right here within the close to time period a minimum of as shares had their largest one-day rally for the reason that day after the election. Shares seem to have discovered help across the election breakout hole round S&P 500 5,775.Reviewing the information related to each the DJIA December Low indicator and the January Indicator Trifecta we discovered that there have been solely 4 different prior years that had a down Santa Claus Rally, a shut beneath the prior DJIA December closing low and constructive First 5 Days and/or January Barometer: 1980 each FFD and JB up, S&P 25.8%, 1991 FFD down, JB up, S&P 26.3%, 1993 FFD down, JB up, S&P 7.1% and 1994 FFD and JB each up, S&P -1.5%.
Within the above chart of the 30 buying and selling days earlier than and the 60 buying and selling days after DJIA closed beneath its December closing low we now have break up the earlier 38 DJIA December low crossings into 4 teams together with 2025 as of yesterday’s shut (January 15) for comparability. With simply 4 occurrences, years like 2025 have been second finest on common with 1994 the large drag. The very best efficiency was noticed by the years that had the smallest decline after DJIA closed beneath its December low. Years with better than a ten% decline after the cross had the weakest efficiency. Most significantly, it seems the faster DJIA recovers after crossing beneath its December low, the higher its efficiency was. DJIA’s fast rebound this yr off the December low crossing is encouraging.