Wall Street analysts warn: This year's "Santa Claus rally" may be absent, as investors are buying more downside protection
ChainCatcher reports, the "Christmas rally" is typically one of Wall Street's most popular traditions. After Thanksgiving, U.S. stocks often rise slowly, volatility decreases, and December often becomes one of the strongest months of the year. However, strategists say that this year, the "Santa Claus" may not appear.
Amy Wu Silverman, Head of Derivatives Strategy at RBC Capital Markets, said: "I don't know if we will see a 'Christmas rally,' but we will definitely encounter another 'pit' of volatility, or a rebound in volatility." She pointed out that bearish sentiment in the options market has increased, and investors are buying more downside protection.
Omar Aguilar, CEO and Chief Investment Officer of Schwab Asset Management, also sees similar risks brewing beneath the surface. On Monday, he said: "We are seeing a lot of dispersion and divergence in many things. After the government shutdown, the arrival of new macro data has been uneven, and there are early signs of sector leadership rotation."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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