When Will Santa Come For Equities?

December is the feel-good time of the year, and this also goes for equities, as December has been a strong month for the S&P 500 historically. As we showed in Welcome To The Strongest Month Of The Year For Equities Historically, since 1950[1], no month has had a better average return for the S&P 500 than December’s 1.6% gain. Here’s the catch; nearly all of the gains tended to happen later in the month. According to Ryan Detrick, Senior Market Strategist, “We all know December has been a good time for equities, but don’t stop believing in Santa if the first half of the month is weak. In fact, this would be perfectly normal, as nearly all of the gains in December tended to happen the second half of the month.”

Looking at the average S&P 500 performance during December, since 1950 it has been flat as of the 15th, before a big end-of-month rally. This pattern holds true the past 20 years as well, as it has been down 0.4% as of midmonth before Santa comes. For more on what stocks could do this month, be sure to read our latest Weekly Market Commentary due out later today.

[1] Please note: The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.

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Past performance is no guarantee of future results.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

The economic forecasts set forth in the presentation may not develop as predicted.

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There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not ensure against market risk.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

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