Santa shows up a day late, Dow surges 1000+, Biggest point gain ever, 4.98%
Well, Merry Christmas folks. On Monday we were talking about the Plunge Protection Team. Today, everyone is all smiles on Wall Street. A 5% gain on the day is remarkable. Mr. Market changes moods quickly sometimes. Of course if he changes his mood one way sharply he is more prone to changing his mood sharply the other way down the road. But hey, 5% is 5%.
John Augustine, chief investment officer at Huntington Private Bank, said he welcomed Wednesday’s rally but added: “We still have a ways to go. We need to have three days of moving higher into the close to stem this wave of selling.”
A strong sell-off on Monday sent the major indexes down more than 2 percent and ended with the S&P 500 falling into a bear market. Monday’s pullback was also the worst Christmas Eve decline ever. The S&P 500 was down 20.06 percent from an intraday record high set on Sept. 21 before Wednesday’s sharp rebound. U.S. exchanges were closed Tuesday for the Christmas holiday.
The recent decline in stocks “is a buyer’s strike due to lack of confidence in policymakers around the world,” said Augustine. “It’s going to take a long time to recover that confidence.”
The Fed raising rates is an issue. This is true. Interestingly even non-banking non-political people seem to be hip to the Fed's recent moves thanks to the president's tweets. That the Dems took the House is also a confidence shaker. There is the fear that the Democrats are happy to see the economy tank if they can pin a downturn on the President. That is a shame but that is political reality.