November 2023 was a good month for the stock market. The benchmark S&P 500 index rallied 8.9%. Exchange-traded funds that closely track the index, namely - the SPDR S&P 500
The rally marked the second-biggest November gain recorded by the S&P 500 index since 1980, as reported by Bloomberg. It also marked the 18th biggest monthly gain since 1950, chief strategist at LPL Financial noted.
Factors that helped fuel the rally are being recognized as:
- declining bond yields
- solid earnings
- expectations of monetary policy easing by the Fed, and
- seasonal tailwinds
"November certainly lived up to its reputation as being the best month for stocks," said Adam Turnquist, chief technical strategist for LPL Financial. Turnquist expects the average forward returns over the next six months to be 8.8%.
The rally has sparked optimism in the markets. Market pundits are now expecting more gains in the future. The November rally, to many, is signalling a bullish 6 months ahead.
The chart below clearly show that the SPY ETF, a broad indicator of the U.S. stock market, last hit its lows when its price fell below the 200-day simple moving average. Subsequently, the rally in November occurred as the SPY price line rose above this 200-day SMA.
The technical analysis, indicating a significant move above the 200-day SMA, suggests alignment with market strategists' optimistic outlook for the upcoming months.
