Here are the key updates that investors should know at the beginning of their trading day:
1. Is the Santa Claus Rally Happening?
After celebrating another Christmas, investors are keeping an eye on whether there will be a positive trend on Wall Street known as the “Santa Claus Rally.” This term refers to the last five trading days of the year and the first two days of the new year. Traditionally, these days have been favorable for stocks.
On average, the S&P 500 has gained 1.3% during this period since 1969. As of Tuesday’s session, the S&P 500 is close to reaching record levels, carrying some momentum into the shortened trading week. Additionally, all three major stock market averages recently completed an eight-week winning streak.
2. Economic Concerns
There’s a puzzling question on people’s minds: Why do many Americans feel uneasy about an otherwise strong economy? Despite a robust job market, higher hourly wages, rising home values, steady consumer spending, and a recovering stock market, there’s a sense of dissatisfaction among consumers.
Economists are still trying to understand this, and some suggest it could be related to discussions on social media or the rising costs at the grocery store. Karen Dynan, a Harvard professor and former chief economist for the U.S.
The Treasury Department points out that lingering frustration from the inflation experienced in 2021 and 2022 might play a role. She emphasizes that the daily visibility of expenses, like lunch bills, may have a stronger impact on people’s perception compared to annual pay increases.
3. Scaling Back
Tech giants like Google and Meta have scaled down their efforts on diversity, equity, and inclusion (DEI) programs this year, despite previously championing such initiatives.
Some companies have let go of DEI staff and leaders from diverse employee resource groups, reduced learning and development programs, and slashed budgets for external DEI organizations by up to 90% in 2023, according to information.
In response to George Floyd’s murder in 2020, corporations had committed substantial funds to enhance diversity within their workforce and support external groups. However, by mid-2023, job postings related to DEI had decreased by 44%, as reported by job site Indeed.
4. Boost from Sugar
Certain raw materials, particularly sweet ones, might become even more expensive in the upcoming months due to the influence of El Niño. Futures contracts for orange juice, cocoa, coffee, and sugar have surged, partly due to extreme weather and supply concerns linked to this weather pattern.
El Niño is a natural climate phenomenon occurring when sea temperatures in the eastern Pacific rise 0.5 degrees Celsius above the long-term average, often leading to increased storms and droughts. Agribusiness bank Rabobank predicts a significant impact, especially on major sugar-exporting countries like Thailand, India, and Australia. However, the global effects of this impact usually take time to unfold.
5. Treading water
Is DC Studios losing its top spot? The latest superhero film, “Aquaman and the Lost Kingdom,” had the fourth-lowest opening in the history of the DC Extended Universe franchise. The movie earned $28.1 million in its domestic opening, falling short of expectations, which were between $32 million and $42 million.
This is less than half of what the “Aquaman” movie earned in its opening weekend back in 2018, which was $67.8 million. Additionally, it’s likely to be Jason Momoa’s final appearance as the main aquatic hero, as Warner Bros. Discovery announced earlier this year that the entire franchise would undergo a reboot in 2025 under the new leadership of DC Studios.
Summary
The trading week starts with a potential Santa Claus Rally, but economic concerns persist among Americans. Tech companies scale back diversity efforts, while raw material costs may rise due to El Niño. DC Studios faces challenges as “Aquaman and the Lost Kingdom” disappoints, signaling a franchise reboot in 2025.
