Home ›› 24 Dec 2022 ›› Stock
This year, it looks like Santa Claus has no plans to visit Wall Street. The S&P 500 (.SPX) is on course for its third weekly decline and the famed “Santa rally”, where the index stages a run-up in the week leading to Dec. 25, hasn’t materialised.
In fact, as Decembers go, this one is pretty grim. The S&P is on track for a 6.3% decline this month, its fourth-worst December on record, with the top spot going to December 1931, when it fell 14.53%, followed by 2018, with a 9.4% drop, and 1930, when it lost 7.4%.
Crunching the numbers, the S&P 500 has rallied in the week leading up to Dec. 25 in 65 out of the last 90 years - scant consolation to anyone nursing losses on their portfolio right now, reported Reuters.
The S&P 500’s Santa rally has continued beyond Christmas and into at least the first week in January in 53 out of the last 90 years, according to Reuters calculations.
On average, since 1932, the S&P 500 has returned some 0.4% in any given Santa rally week. That might not seem especially exciting, but historically the index has returned an average of 0.16% every week of the year in the last 90 years, so it’s not to be dismissed either.
The biggest Santa rally was a whopping 5% weekly gain in 1991, right after the Federal Reserve, under Alan Greenspan, delivered a three-quarter point interest rate cut - the most in a month since late 1984 - as it battled a sluggish economy and high unemployment.
