So the big boys that pounded the S&P 500 index futures in the waning minutes of Tuesday’s session had it right. The end of the Santa Claus rally, at this moment in time, has marked at least a short-term top in the index.
In fact, Tuesday’s close (4784.25), which was just under Monday’s all-time closing high (4786), was the battleground in premarket and early on in the regular session. That is evidenced by the high for the day being 4788.25.
Interestingly, the index popped off the initial reading of the minute, nearly reaching 4780. However, when the Street began to read the fine print, it became obvious that the Fed was reinforcing its more hawkish tone. Interestingly, that is really not out of sync with recent Fed statements and testimony on the Hill over the last few weeks.
Investors that did not give up on the “growth trade” for the “January Effect” early on were punished. In addition, investors hiding out in big value tech, Gold or Bitcoin found out that was no safe haven either.
Although the index began to sharply retreat after the minutes were released, the pain was really inflicted in the last few hours. The damage for the session was a decline of 91.75 handles to close at 4692.50.
The biggest gainer of the top components was Johnson & Johnson (NYSE: JNJ). For the session, the issue added $1.14 or 0.6% to close at $172.22.
That was in stark contrast to the cash index’s decline of 1.94%.
The super high beta Nvidia Corp (NASDAQ: NVDA) was the biggest loser of the top components. For the session, the issue skidded $16.86 or 5.76%.