And just like that... December is upon us.
It’s been a volatile handover from November with U.S. major indices underperforming, dragged down by steep declines for the Nasdaq. Europe’s Stoxx 600 managed to hold onto gains, making November the fifth positive month in a row. But tech stocks also suffered, as concerns over AI valuations and spending plans played out across global stock markets.
So what does this mean for December — can stocks stage a seasonal Santa Rally, or will it be more ‘bah humbug’ in the final trading month of the year?
Fidelity International crunched the numbers: The FTSE 100 has delivered a positive return during December in 24 out of the last 30 years. There could be some festive cheer for the U.K. this year, with markets pricing in a 90% chance the Bank of England will cut the interest rate in December after the budget was seen as avoiding any seriously inflationary measures.
It’s a different picture for the European Central Bank, where markets see zero chance of a cut, but this is also seen as a positive sign as the governing council said policy is in a “good place” in their last set of minutes. European and Asian stocks have tracked the U.S. higher each time expectations rise for a cut at the next Federal Reserve meeting in December, with a near-83% chance of a reduction now expected by markets, according to CME Fedwatch.
