Tags: Stovall | S&P 500 | gain | market

S&P's Stovall: 'We Think the S&P 500 Should Do Well in December'

By    |   Tuesday, 02 December 2014 01:53 PM

The S&P 500 index has registered a 2.5 percent gain for November, so can that be followed by a strong December?

Yes, say many market participants.

December represents the second best month for the Dow Jones Industrial Average for the last 50 years, according to Bespoke Investment Group data cited by USA Today. The Dow has advanced 1.6 percent in December on average during that period, registering increases almost 70 percent of the time.

And the S&P 500 index has chalked up gains for six consecutive weeks, its longest streak since one of eight weeks that ended in November 2013, Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told the paper.

Sam Stovall, U.S. equity strategist at S&P Capital IQ, certainly sounds bullish. "In support of history, we think the S&P 500 should do well in December," he told USA Today.

"Our projection for solid November employment gains, our forecasts for improving holiday retail sales and the prospects for better-than-expected fourth-quarter profit growth should help maintain the market's upward momentum."

Patty Edwards, senior investment strategist at U.S. Bank Wealth Management, agrees. If oil prices don't rise significantly, "the market has a bit of a tailwind," Edwards told USA Today. "Longer-term, the market will trade on earnings — which we view as still positive — more than emotion. But as long as the consumer remains in a good mood, it would appear to us that Santa Claus is indeed coming to town."

Meanwhile, Mohamed El-Erian, chief economic adviser to Allianz, noted that while stocks have soared to record highs this year, commodities have slumped and bond yields have slid.

But the equity side of that equation may reverse, he wrote in the Financial Times.

If global growth doesn't accelerate substantially next year and economic policy doesn't improve, "equity investors will regret not paying greater attention to the messages coming from their counterparts in the bond and commodity markets," El-Erian stated.

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The S&P 500 index has registered a 2.5 percent gain for November, so can that be followed by a strong December?
Stovall, S&P 500, gain, market
Tuesday, 02 December 2014 01:53 PM
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