Year-end buying could be the tail wind that pushes the Dow to 18,000, a psychological level that could give any Santa rally more steam.
"Trends all of a sudden reversed, and investors believe now that low oil prices are good and that could push stocks even higher," said Jack Ablin, CIO at BMO Private Bank. "It's more of a retail number. I suppose Dow 18,000 would certainly get people's attention. When you're closing a year on a high like that, that makes an important statement."
Barring any surprises or weakness in the economic data, stocks could continue to ride higher Tuesday. The S&P 500 closed at its 50th new high of the year Monday, up 7 points at 2,078, and the Dow was also at a record, rising 154 to 17,959. Oil, meanwhile, sank, losing more than 3 percent Monday on OPEC comments that production would remain the same, regardless of price.
Tuesday is the last big data day of the year. Durable goods for November and the third read of third-quarter GDP are expected at 8:30 a.m. ET. Consumer sentiment for December is at 9:55 a.m. New-home sales and key personal income and spending data, including the prices index watched by the Fed, are released at 10 a.m. ET.
Ablin said he is holding off on capital gains selling until early next year, and others may be doing the same as stocks float higher into year-end. "It could be the first week that's soft as people push their capital gains selling into next year, and who knows when the next group of people are buying the dips," he said.
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.