'Jolly' Trend Looks Good for Santa Rally Plus: Charts
The period of seasonal weakness is over, the correction was less than expected, and the underlying trend is ‘jolly strong’ heading into six months of growth, Robin Griffiths, strategist at Cazenove Capital, told CNBC Monday.
“The period of seasonal weakness is now over,” Griffiths said, adding that “it didn’t actually bring much of a setback.”
The seasonal correction set the stock markets back 9 percent, which was less than analyst predictions of a 15 percent correction.
“You often have to detrend the data to see the seasonal deviation,” he said. “So when you are in a period of seasonal weakness the thing only falls a little bit, it means the underlying trend is actually jolly strong.”
This trend will boost the markets now heading into the period of seasonal strength and the markets “can go higher for longer” until the seasonal period runs out in May, he said.
“The financials were one of the drivers to current levels, (but) we’ll need new drivers if we’re going to get a strong six months in the market,” he said, adding that these new drivers will likely be from the continued strength of mining stocks and a strengthening in the value of copper.
-To watch the full interview, see video above