With just two weekends left to shop before Christmas, US consumers have to be feeling a little more flush than they were just a couple of months ago. Back in October, the stock market was in a 10%+ drawdown and interest rates looked like they might never stop going up. Less than two months later, though, the S&P 500 Total Return index is suddenly trading at all-time highs as Treasury yields have plummeted.
Maybe just as important for that “wealth effect” feeling is the huge drop in gas prices that we’ve seen since late September. Back on September 17th, AAA’s national average gas price reading (the cost of a gallon of regular unleaded) hit a 52-week high of $3.88. In the three months since then, there has hardly been a day when gas prices haven’t gone down, and just yesterday the price/gallon ticked down to $3.087. That drop took gas prices below the low of $3.096 seen last December 22nd to their lowest levels in more than two and a half years dating back to 6/24/21.With the stock market at new highs and gas prices suddenly approaching a “2-handle,” Santa may have a little more room in his gift sack this year!
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