US stock indices cross the “year-end rally”

Sherif Adel (Washington)

US stock indices maintained the gains achieved at the beginning of the week, in the Friday trading session, which lasted only three and a half hours, to achieve weekly gains for the fourth week in a row, in confirmation of what is known as the “end-of-year rush,” which investors usually long for at the end of the week. every year.
In quiet trading on the Friday that followed the American “Thanksgiving” holiday, the Dow Jones Industrial Average added 117 points, representing 0.33% of its value at the beginning of the day, and the S&P 500 index rose by 0.06%, while the Nasdaq index was in the red zone, Losing 0.11%. But the loss was not enough to erase the weekly gains experienced by the index.
The three main indices were in the green zone on the weekly level, with increases ranging between 0.89% and 1.27%, with the S&P 500 and Nasdaq indices completing the longest series of weekly increases since last June. Only four sessions before the end of November, the three indices appear to be on their way to achieving their best monthly performance in more than a year.
The yield on the standard 10-year US Treasury bonds reversed its trend that continued for several days, rising in quiet Friday trading, and settling at the level of 4.483%, stopping the series of declines at only five days.
“The story of the year has been interest rates, and now the Fed is giving the green light to investors,” said Ken Mahoney, CEO of Mahoney Asset Management. He added that he expects stock prices to continue to rise, in conjunction with the decline in bond yields, until the end of 2023.
US stocks witnessed large waves of selling during the period from late July until mid-October, with growing fears that the Federal Reserve would keep interest rates at high levels, for periods exceeding investors’ expectations, with the aim of completely eliminating stubborn inflation and bringing the revived US economy to a safe landing. .
In the second half of October, the tone of optimism rose after data issued in Washington showed a limited slowdown in economic activity, a calmness in the labor market, in addition to a rise in the unemployment rate. Futures and futures markets began to show traders’ expectations that US interest rates would begin to be reduced, from their highest levels in 16 years, early next year, compared to what expectations were a few days before.
Currently, interest rate derivatives traders expect a roughly 23% chance that the Fed will cut short-term interest rates at its March policy meeting, according to CME Group’s Fed Watch tool.