The S&P 500 is just one step away from reaching new highs

After recording its longest weekly winning streak since 2017, the S&P 500 rose to 4,774.75 on the first trading day after the holiday when trading volume was sluggish, less than 0.5% from its all-time high of 4,796.56. Despite Overbought warnings, equities continue to rally strongly, fueled by speculation of a rate cut by the Federal Reserve as early as March." The focus will soon turn to whether the market can sustain its momentum heading into the new year, and this may depend on how long the good atmosphere around a potential Fed rate cut can last," said Chris Larkin of Morgan Stanley E*Trade. The so-called Santa Claus market, which consists of the last five trading days of the year and the first two trading days of the new year, has historically been quite strong, with Stock Trader's Almanac data showing that the S&P 500 has risen an average of 1.3% over the past seven days since 1969.

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