Wall Street Breakfast All aboard the Santa Rally sleigh
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Dec 22, 2024 The holiday season is here, hinting at potential stock gains. Discover how the infamous Santa Claus rally is expected to shape the market this year. Dive into the soaring costs linked to improving ChatGPT. Plus, find out the surprising price tag of the classic '12 Days of Christmas' in 2024. Recent legislative updates, like the Senate's move to prevent a government shutdown, are also in focus, shedding light on economic trends affecting investments during this festive period.
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Santa Claus Rally Explained
- The "Santa Claus rally" describes the stock market's tendency to rise during the last five trading days of December and the first few of January.
- Since 1969, the S&P 500 has seen gains during this period roughly 80% of the time, averaging 1.3%.
Market Performance and Potential Early Rally
- David Laut suggests this year's Santa Claus rally might have occurred early due to limited near-term catalysts.
- The Dow Jones is down 4.6% in December, while the S&P 500 and Nasdaq are down 1.7% and up 1.9%, respectively.
Bounce Trade Phenomenon
- Wolf Research observes a "bounce trade" where underperforming stocks rebound as tax-loss selling concludes.
- These stocks tend to outperform by an average of 250 basis points from the last two weeks of December through January.