Is a Santa Claus Rally Coming to Town?

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Is a Santa Claus Rally Coming to Town?

Matt Benjamin, Senior Macroeconomic Analyst, The Oxford Club

It was a November to remember in financial markets.

The S&P 500 rose 10.75% last month, while the Dow Jones Industrial Average gained 3,137 points, briefly topping 30,000, a level long thought to be a kind of psychological milestone.

Investors' spirits were clearly lifted by several factors: the emergence of viable COVID-19 vaccines, the election of Joe Biden and a, most likely, divided federal government chief among them.

But that's stock market history now.

The current question is this: Are the economic and financial ducks lining up for a Santa Claus rally?

A Santa Claus rally is a stock market boom in the final weeks of December that lasts into the first few days of the new year. Some market analysts define it more narrowly, beginning the trading session after Christmas Day and lasting for six trading days.

Either way, unlike its namesake, the Santa Claus rally is an actual phenomenon. If you look at the S&P 500 over the last three decades, stocks have rallied during the period from late December to early January about two-thirds of the time.

Whether the December rally happens often comes down to holiday spending. And despite some indications that Black Friday spending didn't quite meet expectations, Bank of America analysts say that spending might just be spread out over the longer interim between Thanksgiving and Christmas this year. The bank says it expects total holiday season sales could, in fact, exceed expectations.

According to Trends Expert Matthew Carr, that is the rocket fuel the market needs to end the year strong.

"Historically, these final weeks of the year have been some of the best days for investors," Matthew writes. "That means there's still plenty of fuel left in the tank for even more holiday cheer... pandemic or not."

(For more of Matthew's expert trend analysis, sign up for his free Profit Trends e-letter right here.)

And going into 2021, Chief Investment Expert Alexander Green says there may be an "unstoppable factor" that drives hot stocks even higher.

You can sign up for Alex's free e-letter, Liberty Through Wealth, here to learn all about it.

So it looks like Santa may arrive in the market earlier than usual this year and hang out for a while. Be sure to leave out some cookies for him.

Enjoy your weekend and stay safe,

Matt

P.S. We may be looking at a Santa Claus rally in the markets, but the media is still in doomsday mode. But don't let the headlines fool you. Chief Investment Expert Alexander Green knows that all the smoke and mirrors are hiding some fantastic - and potentially profitable - investments that could build your wealth. If you'd like to see him lift the curtain on these investments, just click here for all the details.

 

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O'Reilly with Trump
 

The corporate media told you COVID-19 was President Trump's fault. That he tanked the economy and markets.

But now vaccines are on the way at WARP SPEED. The economy is recovering. THE DOW JUST HIT 30K.

Bill O'Reilly says the media won't thank Trump, or share positives like THIS.

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