Expect a Santa rally and new highs into year-end, says Stock Trader’s Almanac
A Santa Claus rally, and a strong seasonal month for stocks, can push stocks to new all-time highs by year-end, according to the Stock Trader’s Almanac. Stocks continued to rise Monday — with the Dow Jones Industrial Average and S & P 500 each hitting all-time highs to start off the final trading week of November — following President-elect Donald Trump ‘s pick of Key Square Group founder Scott Bessent as Treasury secretary . The Nasdaq Composite also rose during the trading session . That helped the S & P 500 notch a more than 25% yearly advance, with the Nasdaq rising more than 27%. The 30-stock Dow rose more than 18% in 2024. Even with those eyewatering gains, the seasonal and fundamental backdrop for equities is supportive of new highs, even as some investors worry stocks are now priced for perfection, according to Jeffrey A. Hirsch, editor in chief at Stock Trader’s Almanac. “This seasonal mid-November weakness sets up the usual yearend run and reaffirms 2024 is set to exceed our 2024 Annual Forecast best case scenario,” wrote Hirsch, who last year outlined above average gains of 15% to 25% in his best case scenario for 2024. “We expect more new all-time highs before yearend,” he wrote. .SPX 1D mountain S & P 500 Seasonally speaking, December is already the third-best month of any year for the major averages, according to the Almanac. But during presidential election years, the month is actually the second-best for the Dow and the S & P 500, which gain 1.3% and 0.8% on average, respectively, the Almanac showed. When there’s a new president incoming, it’s the fifth best for the Nasdaq, which rises 0.9% on average. What’s more, the final days of December could be especially consequential for markets. The Santa Claus rally, defined as the short rally in the last five trading days of the year and the first two of January, could help push equities still higher, and can be taken as a bullish indicator for 2025 if it materializes, and a bearish one if it does not. Typically, the S & P 500 gains 1.3% on average during this period, in data going back to 1969.