Drifting higher. U.S. stocks are searching for direction this morning as 2019 winds down and trade headlines dissipate. Equities could continue drifting higher on seasonal tailwinds, as the second half of December historically has been one of the strongest periods for the S&P 500 Index. Since 1950, the S&P 500 has rallied an average of 0.4% weekly in the last three calendar weeks of the year.
Record highs. Stocks have put on an impressive show so far this year. The S&P 500 has climbed 27.4% year to date, heading for its best annual performance since 2013. The benchmark has notched 30 record-high closes along the way, including four consecutive record highs through Tuesday. The S&P 500 hasn’t posted five straight all-time highs since January 2018, so we’ll be watching to see if this drought ends.
Repo market worries. The year isn’t quite over in the short-term lending market, though. The repo market has tended to fluctuate more toward quarter-end, and investors are nervous that we could see a repeat of September’s repo-market volatility. We’ll provide an update on the repo market in today’s LPL Research blog, and weigh in on recent concerns that the repo market could be signaling a more significant meltdown in financial markets.
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