After strong rises in the North American indices after the March lows, which took Wall Street to new historical highs, namely in the S&P500 and NASDAQ, analysts’ forecasts were for the continuation of these gains until the end of the year, however it was still more expected that there would be a consolidation movement, or even a minimum correction, before the traditional end-of-year pull, in what is called Santa rally and which I remember in 2008, although late it managed to free the Bulls from the trouble they were in, due to devaluations from October to that year’s Christmas Eve.
The main issue concerns the time of each phase, even more so because in November there are US presidential elections, which makes the next few weeks of extra volatility, since the political game will be in the next one in Congress stimulus programs, essential for the economy to be able to have an oxygen balloon to overcome this phase of greatest fragility. Equally important will be the noise surrounding the topic of trade war, as it is a topic that the current president often uses when he wants to increase his popularity with his primary constituency.
In any case or when, a Santa rally is to be expected, it is also very likely that the coming months will be of increased volatility, so it is advisable to be cautious about leveraging positions.
