Yardeni Research predicts a “Santa Claus rally” will propel the S&P 500 to 7000 by the end of the year. This forecast is based on a resilient economy despite some concerning labour market data. The firm believes consumers are continuing to spend, and inflation remains under control, sitting just below 3 per cent. Solid federal tax receipts also indicate ongoing economic expansion. Yardeni Research is an investment strategy firm that provides research and analysis to institutional investors.
Despite these positive signs, Yardeni Research expects the Federal Reserve to cut the federal funds rate again at its December 10 Federal Open Market Committee meeting. Since September 2024, the Fed has already lowered the rate by 150 basis points through October. These factors combined are expected to boost the stock market in the final weeks of the year.
The S&P 500 closed at 6812.61 on Wednesday. US markets were closed on Thursday for the Thanksgiving holiday. Trading resumed for a half-session on Friday, closing at 1pm.
