Is The Santa Rally Over? What It Means For Stocks In 2024
Portfolio Pulse from Neil Dennis
The S&P 500 index experienced a 1.4% drop on Wednesday, ending a 10-day winning streak despite positive economic indicators and a dovish Federal Reserve. The decline was attributed to heavy trading in zero-day options (0DTE), particularly put options, which forced market makers to sell stocks to hedge their exposure. The sell-off was concentrated in major tech stocks, including Apple and Alphabet, which have seen significant rallies this year. Some analysts view the pullback as a warning sign, while others attribute it to low trading volumes typical of the holiday season.
December 21, 2023 | 7:23 pm
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NEUTRAL IMPACT
Apple shares were part of the 'Magnificent Seven' stocks that experienced a sell-off, attributed to heavy 0DTE options trading and overbought conditions. Despite the drop, analysts suggest these stocks, including Apple, may recover soon.
Apple's stock was directly impacted by the market sell-off, but the sentiment among analysts suggests a potential recovery, indicating a neutral short-term impact.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Alphabet, as one of the 'Magnificent Seven' stocks, saw its shares drop during the S&P 500's decline. The sell-off was linked to 0DTE options activity, but the outlook for recovery remains positive according to analysts.
Alphabet's stock experienced a decline due to the broader market sell-off, but the analyst perspective points to resilience, suggesting a neutral short-term impact.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80