The question many clients have asked their Accendo trader this week is, “How come the Dow Jones is so close to 20,000?”

The most recent surge on the index, which has already been rallying at a phenomenal pace since Donald Trump was elected back in November, was due to the Financial sector’s positive reaction to the US Federal Reserve’s decision to hike interest rates for only the second time in a decade.

The two big name US banks on the index, Goldman Sachs and JP Morgan, led winners on Thursday, with the former having already accounted for almost a third of all gains made on the Dow’s march from 19000 points despite having only an 8% weighting. Expectations that the rate hike will improve the duo’s profit margins has meant their share performance (and subsequently the index) has gone from good, to even better.

This has had a knock on effect back on this side of the Atlantic. Once again, UK banking stocks were some of the top performers on the UK 100 index this week, helping the index to venture back above the 7000 mark during what has already been one of the most impressive Santa Rally performances in recent history.

So far during this pre-Christmas period, the average UK 100 constituent’s share price has increased by 2.1%. In context, if tomorrow were to be the 1st of January, this would be the second best performance since 2006, falling short of the top spot by only 0.1%.

You might be asking why the Santa Rally is still relevant to you even though there’s only a week until Christmas?

Here at Accendo, we use Bloomberg terminal analysis in order to keep clients up to date with the latest broker ratings. Furthermore, we monitor the average target price that these brokers set for stocks over the coming 12 months.

The fact is that there are still many stocks not in the third of the current period’s rally that are enjoying a stellar performance, whilst there are several more notable stocks that enjoy particularly bullish outlooks from City brokers that are yet to reach their current target prices.

One such example is Dixons Carphone (DC.) is currently trading 3.1% higher since we released our Santa Rally publication in mid-November, a commendable performance that surprisingly leaves it in the middle of the UK 100 pack as the 44th best performing stock. However, 88% of analyst recommendations for DC. currently are ‘Buy’ ratings, whilst 0% are ‘Sell’ ratings. This places it as one of the top 3 rated UK 100 stocks. What’s more, Dixons Carphone’s share price is still trading 24% below the 12 month broker target price as of close on 15 December. Whilst these analyst recommendations do not provide perfect forecasts (DC. target prices vary by 180p) it certainly gives a different perspective on what opportunities you might be thinking of undertaking.

We use analysis such as this in many of our regular research publications, whilst our traders can inform you of up-to-the-minute broker updates should you request it either by phone or email. Would you benefit from receiving more information such as this on your favourite trades? All it takes our clients is a phone call to their broker. By signing up to receive our research here you too can enjoy a much deeper insight into trading and be more informed, today!

Thomas Jenvey, Trader, 16 December