Will Santa bring the gains?
The Santa Rally is the perception that December is a very good time for the markets. Data from IG shows that since 1985 the FTSE100 has gained over 2% during the month 83% of the time. Data from Schroders shows that global markets rise during 78% of Decembers since 1987, with stock prices up on average 1.7%. The chart below shows the increase in the S&P 500 during the last five days of the year and the first two days of January:
Source: https://www.cnbc.com/2019/12/20/official-santa-claus-rally-period-begins-next-week.html
There is no solid evidence to identify why this happens but theories range from goodwill to managers re-balancing portfolios, lower volume trading moving the markets and even people investing Christmas bonuses.
After the incredible year the markets have seen it would be hard to beat some of the gains from previous months but hopefully it will be another green one none the less!
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