Don't Bet on a Jolly Santa Rally This Year
-
The "Santa Claus rally" refers to the stock market's historical tendency to rise in the last week of December and first two days of January.
-
This year, stocks have already rallied heading into the official Santa Claus period, so expectations for gains should be dialed back.
-
A midweek selloff showed the potential for sharp drawdowns even in a strong market.
-
Historically, Santa Claus rally performance has correlated with full-year returns the following year.
-
While the Santa rally pattern is real, it's more of a curiosity than a reliable phenomenon.