Last week, Andrew brought you some valuable end-of-year tax ideas, I would urge you to take a look at them if you haven’t already. There have been many changes with the One Big Beautiful Bill that affect most of us in one way or another.
As we head into the end of the year, I thought this week we could look at some high-level things from a markets perspective.
The first is how quickly bullish sentiment comes back to the market. Two weeks ago it measured -10.7%. As of December 10th, it was +14%. A big change in a short period. The AAII sentiment index is below.
A similar situation presents itself in the CNN Fear and Greed Index. A month ago it was at 22 (extreme fear) and now it is at 43. Still in the fear category, but just barely.
We have been talking about the market breadth widening out, and it appears to be doing just that. We’ve seen a couple of fits and starts, but could this be the breakout that we have been waiting for? You can see in the chart below that there have been many times where the chart has had a countertrend move, only to see it fall back into the primary channel. I don’t know what the future holds, but this is one of the more interesting moves we have seen in the last several years.
To be clear, the previous chart is a relative chart. The one below is a chart of the equal-weight version S&P 500 (ticker: RSP). Rather than having the chart be dominated by the largest companies, this index weights them all at an equal 0.2%. You can see a nice breakout of the index after September and October consolidations.
Shifting gears, Yahoo Finance has named OpenAI (owner of ChatGPT) as their Company of the Year.
Does that mark a top for the company? Only time will tell, but as I mentioned a couple weeks ago, their private valuation would place them at #15 of the largest companies if publicly traded.
Lastly, for a bit of fun, this is the last full week before Christmas and the first day of Hanukkah. You can find your name below, but this elf, Blinky TwinkleToes, wants to wish you Happy Holidays and all the enjoyment of this season with friends and family!
That’s it for this week. Please let us know if you have any questions or comments about this or any other topic. We will be happy to have a conversation. Bonus points if sign the email with your elf name!