Stocks Rally May Face 'Payback' in Early 2024 After Recent Surge, Strategists Warn
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U.S. stocks have rallied significantly over the past 5 weeks, leaving them potentially "overbought" and due for a "pay back" in early 2024 according to Oppenheimer strategists.
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The recent "everything rally" has lifted the Dow, S&P 500, Nasdaq, and Russell 2000 indexes between 9.6% and 12.1% from end of October through early December.
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Bullish investor sentiment recently hit unusually high levels not seen since August, while bearish sentiment fell to lowest levels since January 2018.
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While not outright bearish, Oppenheimer strategists warn powerful year-end rallies often face profit-taking without FOMO in the first half of the following year.
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With a lot of good news potentially priced in, markets are vulnerable to even small disappointments after the past month's huge rally.