As we head into the final trading week of 2024, Wall Street is asking its favorite year-end question: Will Santa show up again?
If history is any guide, the answer is probably yes. The U.S. stock market has a well-documented tendency to rally in the final stretch of December, specifically between Dec. 23 and Dec. 31. It's a pattern so reliable that traders have given it a festive name.
According to Seasonax data, the S&P 500 has climbed an average of 0.95% during the last trading week of the year, based on 95 years of historical data. The index finished that week in positive territory 69 times, which translates to a solid 71% win rate. The most explosive Santa Claus Rally came in 2018, when the S&P 500 surged 6.28% between Dec. 24 and Dec. 31.
The Dow Jones Industrial Average looks even better through this seasonal lens. Using 128 years of data, the Dow has posted an average gain of 1.06% in the final trading week, finishing higher 92 times for a 77% winning rate. Its strongest Santa Claus Rally happened way back in 1917 with a 7.35% gain, though it came close more recently with a 7% jump in 2018.
Tech stocks tell a different story. The Nasdaq 100 has averaged just a 0.4% gain in the last trading week based on 40 years of data, closing higher only 55% of the time. Not exactly the kind of consistency Santa is known for.
The Five Stocks That Love the Holidays Most
Within the S&P 500, five stocks have delivered standout consistency during the Santa Claus Rally over the past two decades. Here's who makes the nice list.
5. Ralph Lauren Corp. (RL): The fashion retailer has averaged a 1.29% gain during the Santa Claus Rally with a 65% winning rate. Its best performance came in 2018 when shares jumped 8.21%, while the worst was a 2.65% drop in 2015. Ralph Lauren is currently riding a nine-year winning streak during this seasonal period.
4. J.P. Morgan Chase & Co. (JPM): The world's largest bank has delivered an average gain of 1.34% with an impressive 85% win rate. That means JPM shares finished the final trading week of the year higher in 17 of the past 20 years. The bank's strongest Santa Claus Rally occurred in 2008 when it rose 8.31%, while its weakest year was 2007 with a 2.61% decline. JPMorgan is also on a nine-year winning streak.
3. The Goldman Sachs Group Inc. (GS): Goldman has averaged a 1.36% gain with an 80% winning rate. Its best performance came in 2008 when the stock surged 12.2%, though it stumbled in 2015 with a 1.49% decline. The stock has posted gains in each of the past three Santa Claus Rally periods.
2. Assurant Inc. (AIZ): This insurer has delivered an average Santa Claus Rally gain of 1.52% with a 70% winning rate. The stock soared 14.11% in 2008, its best year, while 2007 marked its worst with a 4.07% drop. Assurant is currently on a seven-year winning streak.
1. Newmont Corp. (NEM): The world's biggest gold miner tops the list with a 2.24% average gain during the Santa Claus Rally and a 75% winning rate. Its best year was 2005 when shares climbed 10%. The worst showing came last year with a 2.46% decline.
What stands out here is how financial stocks dominate this list. Three of the top five are banks or insurers, which makes sense given that year-end portfolio rebalancing and window dressing can create buying pressure in the sector. And then there's Newmont, the gold miner leading the pack, perhaps benefiting from year-end safe-haven flows or portfolio adjustments.
Of course, past performance doesn't guarantee future results. But with the odds historically in favor of gains, traders heading into this final week have reason to feel at least a little festive.
