The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
DOWNLOAD
View all Reports
Metrobank.com.ph Contact Us
Follow us on our platforms.

How may we help you?

TOP SEARCHES
  • Where to put my investments
  • Reports about the pandemic and economy
  • Metrobank
  • Webinars
  • Economy
TRENDING ARTICLES
  • Investing for Beginners: Following your PATH
  • On government debt thresholds: How much is too much?
  • Philippines Stock Market Outlook for 2022
  • No Relief from Deficit Spending Yet

Login

Access Exclusive Content
Login to Wealth Manager
Visit us at metrobank.com.ph Contact Us
Access Exclusive Content Login to Wealth Manager
Search
The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
May 29, 2025 DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
May 8, 2025 DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
May 8, 2025 DOWNLOAD
View all Reports
Equities 3 MIN READ

Tax-loss selling in battered US stocks could spur January snap-back

December 8, 2022By Reuters
Related Articles
Dollar eases after Fed-spurred rise; yen stronger ahead of BOJ September 21, 2023 Wall Street meanders, dollar gains as Fed rate hike seen in May April 10, 2023 Philippines central bank governor ready to raise rates by 50 bps in Aug July 7, 2022

NEW YORK, Dec 7 (Reuters) – Investors who sell underperforming US stocks to lock in tax benefits before year-end may be adding to recent pressure on equities while sowing the seeds of a January rebound in some corners of the market.

With the S&P 500 down about 16% year-to-date and many individual stocks nursing even sharper losses, tax-loss harvesting – or investors selling assets with a loss in order to cancel out the income taxes they owe on realized gains elsewhere in their portfolios – may be a stronger than usual headwind to markets this year.

Yet some investors are betting a number of those beaten-down stocks and possibly the broader market could snap back in January, once the selling period is over.

“This is the first time that investors are looking at double-digit declines in about 13 years, and we’ve never seen this level of tax-loss selling before,” said Peter Essele, who oversees roughly USD 11 billion as in assets as head of portfolio management for Commonwealth Financial Network. “That could result in a pretty strong first couple of months as people start reentering long-term assets.”

S&P 500 stocks that are down 10% or more for the year – making them likely targets for tax-loss selling – have historically outperformed the broader index by 8.2 percentage points between November and the end of January during years in which the index fell more than 10%, analysts at BofA Global Research noted in a research report.

The firm identified 159 out of 338 stocks with a 10% or greater loss for the year in the S&P 500 that could bounce following tax selling, including Meta Platforms Inc. (META), Domino’s Pizza Inc. (DPZ), Home Depot Inc. (HD), and Amazon.com Inc. (AMZN). Shares of each company are down 1% or more for December, with Amazon leading the way with a roughly 8% decline.

DoubleLine founder Jeffrey Gundlach told CNBC on Wednesday that risk assets will likely rally in January once retail investors finish tax-loss selling. Strategists at Evercore wrote on Nov. 30 that they were “buyers of stocks whose 2022 Tax Loss selling pressure will soon abate.”

Investors appear to have already started selling underperforming shares. Private clients at BofA, for instance, sold nearly USD 1.4 billion of stocks in likely tax-motivated selling in November, up from roughly USD 800 million last year, and appear poised to continue that outsized rate of selling this month, the firm said.

Vanda Research, which tracks the behavior of retail traders, wrote in a late-November research note that individual investors typically pull an average of approximately USD 1 billion on net from the shares of single US stocks during the last weeks of December and put their funds into ETFs that give exposure to broader markets, helping fuel so-called “Santa Claus rallies” at the end of the year.

Of course, macroeconomic concerns such as monetary policy and worries over a potential recession resulting from the Federal Reserve’s rapid interest rate hikes are likely to remain the main drivers of stock moves in 2023, potentially dwarfing the impact of seasonal flows, said Emily Rowland, co-chief investment strategist at John Hancock Investment Management.

“We wouldn’t want to overplay that trend as we move into more challenging waters next year,” she said.

(Reporting by David Randall; Editing by Ira Iosebashvili and Nick Zieminski)

 

This article originally appeared on reuters.com

Read More Articles About:
Worldwide News Philippine News Rates & Bonds Equities Economy Investment Tips Fine Living

You are leaving Metrobank Wealth Insights

Please be aware that the external site policies may differ from our website Terms And Conditions and Privacy Policy. The next site will be opened in a new browser window or tab.

Cancel Proceed
Get in Touch

For inquiries, please call our Metrobank Contact Center at (02) 88-700-700 (domestic toll-free 1-800-1888-5775) or send an e-mail to customercare@metrobank.com.ph

Metrobank is regulated by the Bangko Sentral ng Pilipinas
Website: https://www.bsp.gov.ph

Quick Links
The Gist Webinars Wealth Manager Explainers
Markets
Currencies Rates & Bonds Equities Economy
Wealth
Investment Tips Fine Living Retirement
Portfolio Picks
Bonds Stocks
Others
Contact Us Privacy Statement Terms of Use
© 2025 Metrobank. All rights reserved.

Read this content. Log in or sign up.

​If you are an investor with us, log in first to your Metrobank Wealth Manager account. ​

If you are not yet a client, we can help you by clicking the SIGN UP button. ​

Login Sign Up