LIVE MARKETS-A correction in time? Stocks could be close to breakout

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

A CORRECTION IN TIME? STOCKS COULD BE CLOSE TO BREAKOUT

After stalling in October, stocks have failed to follow through with a significant breakdown. That indicates that the market has been correcting in time instead of price, according to Brian Reynolds, chief market strategist at Reynolds Strategy. And a strong move, likely to the upside, should follow.

Reynolds notes that stocks have traded in a narrow range since October, following a strong rally into that month from lows in April caused by tariff concerns.

But “the opposing pressure from bearish equity investors versus debt-fueled buybacks means that a powerful stock price move should follow once stocks break out from this trading range, and we expect that such a break will be to the upside,” he said.

The recent standoff in stocks has occurred as debt-financed share buybacks are offset by short selling, Reynolds said. With January typically seeing a surge in corporate bond issuance, buybacks should pick up again.

“We think such buybacks could cause an upside breakout in stock prices,” Reynolds said.

(Karen Brettell)

EARLIER ON LIVE MARKETS:

POP THE CORK: JOBLESS CLAIMS DROP AMID SEASONAL VOLATILITY CLICK HERE

US STOCKS START OFF NEW YEAR'S EVE SESSION WITH LITTLE POT AND PAN BANGING CLICK HERE

AS SANTA RALLY SPUTTERS, ATTENTION SOON TURNS TO JANUARY BAROMETER CLICK HERE

FRESNILLO TAKES FTSE GOLD CLICK HERE

LONDON STOCKS MUTED ON FINAL DAY OF THE YEAR CLICK HERE

BEFORE THE BELL: EUROPE WRAPS UP 2025 ON A HIGH CLICK HERE