Enjoy the year-end rally, for now

Get prepared for 2024 with this free guide EDITOR’S NOTE: I’m sharing some market analysis from the team over at Avalon today. From time to time, I like to give you a behind-the-scenes look at what clients at money management firms come to expect from their investing teams. Dear Reader, November was one of the best months ever for stocks, with returns across all major asset classes. Too far too fast you say? Is this something we should be worried about or embrace? Here is an important data point that suggests the answer is to embrace the strength. The chart below shows the path of the S&P 500 (upper pane) and the percentage of S&P 500 Stocks at 20-Day New Highs (lower pane). As you can see, when we see these surges in momentum it tends to coincide with local bottoms for equities (see the circled areas in the upper pane). In other words, this condition was found at the beginning of new cyclical stock advances. This table shows that following such breadth thrusts, the market tends to be higher most of the time. This also fits within seasonal expectations, as historically, December is better for SPX returns than November (on average). There's also no evidence that a strong November pulls returns from December, it can happen, but autocorrelation is more likely. What drove such robust returns? In large part, it was the decline in interest rates as the yield on the U.S. Ten-Year Note fell from nearly 5% back to around 4.30% by month end. In fact, bonds had one of their best months… EVER! It seems that the market has been embracing no further rate hikes by the Fed. Indeed, the mention of “soft landing” is at record. The danger of course is that reality fails to meet expectations in which case the market will need to adjust. But for now, enjoy the spiked eggnog and the year-end rally. It’s also important to note that despite all the recent excitement for stocks, the S&P 500 SPDR (SPY) is simply back to where it was this summer, reflecting a 50-point trading range. As inflation, interest rates, and the geopolitical climate continue to give everyday investors whiplash, here at Avalon we aim to empower you as much as we can to keep your hard-earned money safe. [Our free guide]( shows you why the old “tried-and-true” methods of 60/40 investing are over and which new methods are taking their place. You’ll also learn how to make the best choices with your investments moving forward. [Sign up now]( and we’ll immediately email you our free eBook – Death of 60/40: Why Old “Tried-and-True” Methods of Investing Are Over (And What New Methods Come Next). You’ll also receive a complimentary subscription to ADAPT where we send you investment tips and ideas to help strengthen your portfolio. Don’t wait to get this important information because the choices you make now could determine your financial future. Safe investing, DISCLAIMER: True Market Insiders sent this to you on behalf of a third party, Avalon, a registered investment advisor. Avalon and True Market Insiders are separate entities. Neither company owns the other. Both companies are owned by Chris Rowe. This article is an advertisement to sign up for a free e-letter called ADAPT, which is published by Avalon. True Market Insiders is NOT a registered investment advisor and is not licensed to give advice. True Market Insiders is a financial publishing firm that broadcasts and publishes educational investment material for educational purposes only. [YouTube]( [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( DISCLAIMER ©2023 by True Market Insiders, LLC, Protected by copyright laws of the United States and international treaties. 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