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Good morning! Hope you had a great Christmas. We have a data- and history-packed edition today — let’s dive in.

That time of year again

Santa might be done climbing chimneys for the year but he’s still expected on the trading floor for another week. 

Investors are anticipating strong momentum heading into 2025 thanks to the so-called Santa Claus Rally, which includes the final five trading sessions of the year plus the first two of January. 

Dating back to 1950, the S&P 500 climbs 1.3% on average across these seven days. A typical stretch of the same length sees about a 0.3% gain, data from LPL Financial shows. 

While Santa skipped 2023, he visits traders more often than not. In 75 years, the Santa Rally period has only notched a back-to-back losing year twice. 

Tuesday — Christmas Eve — marked the first day of the seasonal indicator.

Ryan Detrick, chief market strategist for Carson Investment Research, noted that no other 7-day period is likely to be higher (up 78.4% of the time). 

Meanwhile, only two 7-day periods have a better average return than the Santa Rally. 

Over the last century, December marks the most-likely positive month of the year for the S&P 500. Bank of America data shows the month finishes higher roughly three in four times, with the Santa Rally providing most of the gains. 

During election years, the benchmark index has finished higher in December 83% of the time. 

“This late-December strength tends to carry over into the next year with the [S&P 500] up 63% of the time on an average return of 0.72% (1.12% median) during the first ten days of January,” BofA analysts wrote in a recent note. 

With only one day in the books for the Santa Rally so far, the S&P 500 has already secured its third-best annual performance of the last two decades.

History suggests Santa may push the index into the top-performing slot before the calendar turns. 

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Last thing:

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