Christmas is approaching and Santa has yet to be seen. Instead the Grinch has infiltrated Wall Street, evidenced by the cold-hearted returns seen so far this month.
Entering today, the Nasdaq Composite is down 6.7%, the Russell 2000 is down 6.5%, the S&P Midcap 400 is down 6.3%, the S&P 500 is down 5.6%, and the Dow Jones Industrial Average is down 4.8% in December.
Moreover, there was a Bloomberg article over the weekend suggesting sovereign wealth funds, pension funds, and balanced mutual funds could sell up to $100 billion of stocks over the last few weeks in a rebalancing effort.
To say the least, the stock market is very much off balance in this typically good month as growth concerns have come to the fore. They won’t disappear overnight either like Frosty in a greenhouse.
That reality seems to be hanging like a wet blanket over the futures market.
Currently, the S&P 500 futures are flat and are trading roughly in-line with fair value, the Nasdaq 100 futures are up nine points and are trading fractionally above fair value, and the Dow Jones Industrial Average futures are down 15 points and are trading fractionally below fair value.
That is a fairly weak disposition knowing that the S&P 500 has dropped 5.4% in the last two weeks. Yes, there is some thinking that the market might be due for a bounce after slipping on ice like it has, yet there isn’t any real traction yet.
Everyone, it seems, is waiting to see if Santa is going to come around, which leaves the market stuck between feelings of hope and angst. Accordingly, there isn’t much happening at the broad market level this morning.
All the action is happening in story stocks like Madrigal Pharmaceuticals (MDGL), which is soaring 210% following a positive Phase 3 trial result, like Tesla (TSLA), which is up 2.0% after Elon Musk suggested he would abide by a Twitter poll saying he should step down as Twitter CEO, and like Aerojet Rocketdyne Holdings (AJRD), which is up 1.8% on the news that it is being acquired by L3 Harris (LHX) for $4.7 billion, or $58.00 per share, in cash.
Business is happening in Whoville, but the overall Christmas spirit is still missing.
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Originally Posted December 19, 2022 – Wall Street still missing that Christmas spirit
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