As we begin December, the bulls have been running strong for the stock market, with the Dow Jones Industrial Average gaining 900 points in November and closing above the 30,000 milestone at the start of the month. This is a strong sign that the market is in a good place as we enter the final stretch of 2020.
But what does a strong start to the month mean for the rest of the year? The answer is one of cautious optimism. Although a strong start to December is a welcome sign of momentum, there is still a ways to go before the end of the year. The market has been on a roller coaster ride over the last few months, with the presidential election, the stimulus measures, and COVID-19 among the many factors that have weighed on market sentiment.
The good news is that with the market starting on an optimistic note, confidence in the economy is likely to remain high throughout December. Investors are likely to be cautiously optimistic about new developments and progress made in the fight against the pandemic as the month progresses.
However, the December rally may not be enough to offset the bearish trends seen throughout the year. The year has been marked by uncertainty, which could continue into the new year. Additionally, the end of the year tends to be sluggish for stocks as both companies and investors generally become more risk-averse during this period.
In the big picture, the fact that the market has been able to bounce back in November and start December on a strong note is a good sign that the markets remain resilient despite the lingering uncertainty that remains in place. This could provide some level of optimism for investors, with the hope that the market will remain strong throughout the year.
Ultimately, December is shaping up to be a critical month for the stock market, with investors closely watching to see how the current momentum carries on throughout the end of the year. Cautious optimism is likely to be the order of the day as things progress, as investors weigh the short-term gains against the risks that could still be ahead.