In recent days, stocks have stopped due to concerns that consumers are not as strong before the Christmas shopping season, which affects the economy and, therefore, the markets.
The S&P 500 has already recovered 11% from its October 2023 low and accumulated growth of 18% until this year. unfortunately, this rally may be over.
Specifically, a group of Citi analysts led by Chris Montagu that is explained Future run last week is “mixed” which leaves the net positioning of the stock index with a “slightly bearish” appearance.
“As the S&P 500 rose for a fourth consecutive week, the underlying signals from future outflows disappeared,” Montagu wrote in a note published Monday. “The first stage of the rally was accompanied by a large unwinding of the October short positioning,” he said, adding that subsequent new additions to high positions have disappeared.
In November alone, the S&P 500 appreciated 8%, creating one of the highest-rising months on record. The reason is the potential end of the Federal Reserve (Fed) interest rate adjustment cycle and strong economic growth.
However, in recent days, Stocks were held back by concerns that consumers may not be as enthusiastic heading into the holiday shopping season. which affects the economy and, therefore, the markets.
In any case, according to Montagu, there is still a chance that the S&P 500 will continue to grow before the end of 2023 because increasing losses on remaining short futures positions increases the potential for forced covering.