Rosenberg Daily - No Santa Claus Rally?

The combination of unwinding fiscal stimulus, the lagged impact of the financial tightening we have seen since the summer and a deepening Eurozone recession washing on American shores will surely take its toll on the economy in the early part of next year. This may be one reason why we are not seeing the Santa rally despite the positive seasonals and the more positive tone to the incoming economic data of late. Last we saw, the S&P 500 is down 5% for the year and we do not recall that ever happening in the third year of a presidential election cycle before. Normally this is the sweet spot of the cycle where the market is up traditionally by 20% (which is what the consensus of Wall Street strategists were looking for in 2011). The fact it is down 5% with six weeks left in the year is a pretty big deal.