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Santa Claus is handing out presents on Wall Street.
The so-called Santa Claus rally that appears to be unfolding in the US stock market in the last week of December and the first two trading sessions of the new year is off to its best start since 2000-01, when the market gained 5.7% over the year. period, according to Dow Jones Market Data.
Dow Jones Market Data
In fact, in the eight instances since 1929 that the index has risen at least 1% to begin that seven-session trading period toward the end of the year, the Santa Claus rally has yielded a profit 100% of the time, with an average profit of 3.3%.
On Monday, the S&P 500 SPX,
closed in record territory, up about 1.4%, with the session technically marking the start of the season period known as a Santa Claus rally; if earnings hold up, the stock market generally performs well, the data shows.
The upbeat mood to start the last week of trading in 2021 helped the Dow Jones Industrial Average increase DJIA,
and the Nasdaq Composite Index COMP,
with even higher risk assets, such as bitcoin BTCUSD,
pushed up to start the week.
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Read: If Santa doesn’t come to Wall Street in December, the Grinch will hit the stock market in January, history says
How is the market performing for the rest of January?
January ends higher on average, with average gains of 2.94% and median gains of 3.7%, as the S&P 500 has entered Santa’s rally period with at least 1% gains.
Checking out: Merry Christmas, Wall Street! But there’s no New Year’s Day for the stock market this year — here’s why.
The Santa Claus rally trend was first identified by Yale Hirsch, the founder of the Stock Trader’s Almanac, which is now run by his son Jeff.
Hirsch was known for saying that “if Santa didn’t call, bears could come to Broad and Wall.”
Ryan Detrick, chief market strategist for LPL Financial, notes that losses during Santa’s rally period tended to lead to negative results in January. These include losses in 1999, 2005, 2008, 2015, and 2016.
Certainly, past performance is no guarantee of future performance, and the statistical trends for market performance after the Santa Rally are quite thin.
MarketWatch columnist Mark Hulbert writes that even with statistics and theory on his side, “Santa’s rally is no guarantee.”
Ken Jimenez contributed.
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Sources 2/ https://www.marketwatch.com/story/santa-claus-rally-is-off-to-best-start-in-20-years-heres-what-history-says-about-the-stock-markets-performance-when-rally-starts-this-well-11640630360 The mention sources can contact us to remove/changing this article |
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