Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
Login Archives Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: Stock Market Today

Why the 2013 Santa Claus Rally Will Be the Best in Years

By , Money Morning • November 20, 2013

Start the conversation

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

The Dow Jones Industrial Average and S&P 500 typically see their largest gains of the year in December, thanks to a surge coined the "Santa Claus rally."

Since 1929, the S&P 500 has averaged a 1.5% return in December, with markets posting positive returns more than 70% of the time. The only other month with a 1.5% average return is July, with the remaining months' average gains ranging from -1.1% to 1.2%.

December is also tied for the highest average monthly gains for the Dow Jones Industrial Average. From 1910-2010, December has averaged a 1.32% gain, tied with April. Other months' averages range from -0.88% to 1.28%.

But the biggest market jump is normally seen on the last five trading days of the year and the first two of the New Year - which is how the rally became associated with Santa.

When isolating that single week, the S&P 500 has posted an average gain of 1.8% since 1929. Stocks have risen 79% of the time during that week in the past 83 years.

The December bump can be attributed to many factors. Some people invest their Christmas bonuses. Others invest with end-of-the-year tax considerations in mind. Maybe it's just holiday cheer hitting Wall Street.

In 2012, however, the Santa Claus rally was lackluster. The Dow Jones Industrial average posted a gain of just 0.6% in December, while the S&P was up 0.7%. The Nasdaq inched up 0.3% that month.

Not exactly coal in investors' stockings, but certainly not what investors wished for either.

This year, however, the Santa Claus rally may be the best the markets have seen in years.

In fact, Money Morning's Global Investing & Income Strategist Robert Hsu recently pointed out three factors he believes will send stocks higher than normal this December.

"Money flow into global stock markets remains strong, fueling major averages higher into the holiday season," Hsu wrote to his Permanent Wealth Investor subscribers last Friday. "Last month, TrimTabs Investment Research reported that more than $40 billion flowed into U.S. equity markets, much of it from cash sitting on the sidelines."

"The [liquidity data] from TrimTabs shows money flowing in from cash sitting in the bank, not the bond market," Hsu said. "Investors realize that at zero interest rate, cash must be put to work to outperform inflation."
Liquidity is key, but Hsu believes strong gross domestic product (GDP) growth and recent unemployment figures will also play large roles in this December's rally.

"The unemployment figure that came out this month showed monthly pace of net hiring to 202,000 over the last three months, around 7.3% unemployment rate," Hsu said. "Q3 GDP growth of 2.8% is the fastest since Q1 of 2012, so that's good."

But those aren't the biggest reasons to expect a strong Santa Claus rally is coming to town...

Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter

Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…

Claim My Free Report

Subscribe
Login
Notify of
guest

guest

0 Comments
Inline Feedbacks
View all comments


Latest News

September 18, 2023 • By Garrett Baldwin

Dogs That Are Fluent in Spanish for $200, Alex.

September 18, 2023 • By Shah Gilani

earnings
This Income Play Is a Perfect Hedge in a Sluggish Market

September 15, 2023 • By Shah Gilani

We're Headed for a Second Banking Crisis - Here's What to Do
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Penny Hawk Midday Momentum
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Quantum Data Profits Flashpoint Trader Darknet Alpha Accelerators Brutus Alerts Resource Traders Alliance L.A.U.N.C.H. Investor Rob Roy Trader Long-Term Equity Profits

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz