even though the 10Y rates continued weakening
As a consequence, the equities markets still look cheap here, but the momentum has now changed to weaker prices. Hence equities will be cheaper in the near future.
Interesting to see that the 5Y, 10Y and 20Y treasuries are under selling pressure here. This indicates that investors believe that interest rates will increase - as stated by the Fed anyway.
The S&P500 Futures look bearish here, while the Cumulative Tick has stayed flat for weeks due too interest rate pressure on the small caps.
Oil has bounced in the past days, but copper looks bearish here - probably due to an explosion in Covid contaminations in China as a consequence of the new policy that is now taking place. Investors expect more production disruptions as well as more health related problems.
Conclusions:
A few years ago, I made a small study of the S&P500 price evolution for the last two weeks of December. If I remember well, I found out at that time that the last two weeks were overwhelmingly negative when the S&P500 was displaying a price decrease between January 1 and December 15.
Hence I do not expect a Santa rally here.
I would stay in cash for now.
