As traders enter the final trading week ofthe year, one familiar question dominates Wall Street chatter: Will the Santa Claus Rally show up again?
History says the odds are favorable. TheU.S. stock market has delivered consistent gains in the final stretch of December, typically defined as the period between Dec. 23 and Dec. 31.
According to Seasonax data, the S&P 500has risen an average 0.95% during the last trading week of the year across 95 years of history.
The index finished that week higher in 69instances, translating into a 71% win rate. The strongest Santa Claus Rally for the S&P 500 came in 2018, when the index surged 6.28% between Dec. 24 and Dec. 31.
Seasonal strength looks even better for theDow Jones Industrial Average.
Using 128 years of data, the Dow has postedan average gain of 1.06% in the final trading week of the year. It finished higher 92 times, delivering a 77% winning rate.
The Dow's strongest Santa Claus Rallyoccurred in 1917, with a 7.35% gain. More recently, it climbed 7% in 2018.
Tech stocks, however, show weaker seasonaltendencies.
The Nasdaq 100 has averaged just a 0.4%gain in the last trading week, based on 40 years of data. It closed higher only 55% of the time.
Five Stocks With The Strongest SantaClaus Rally Track Record
Looking at S&P 500 constituents, thesefive stocks have shown standout consistency during the Santa Claus Rally over the past two decades.
5. Ralph Lauren Corp. (NYSE:RL):
Theapparel giant has averaged a 1.29% gain during the Santa Claus Rally, with a
65% winning rate. Its best year came in 2018, when shares jumped 8.21%. The
worst performance was a 2.65% drop in 2015. The stock is currently riding a
nine-year winning streak during the Santa Rally period.
4. J.P. Morgan Chase & Co.(NYSE:JPM):
The world’s largest bank has delivered anaverage gain of 1.34%, with an impressive 85% win rate. Meaning, JPM shares
finished the final trading week of the year higher in 17 of the past 20 years.
The bank's strongest Santa Claus Rally occurred in 2008, when it rose 8.31%.
Its weakest year was 2007, with a 2.61% decline. JPMorgan is also on a
nine-year winning streak.
3. The Goldman Sachs Group Inc. (NYSE:GS):
Goldman has averaged a 1.36% gain, with an 80% winning rate. Its best
performance came in 2008, when the stock surged 12.2%. The worst year was 2015,
with a 1.49% decline. The stock has posted gains in each of the past three
Santa Claus Rally periods.
2. Assurant Inc. (NYSE:AIZ):
Theinsurer has delivered an average Santa Claus Rally gain of 1.52% and a 70%
winning rate. The stock soared 14.11% in 2008, its best year, while 2007 marked its worst with a 4.07% drop. Assurant is currently on a seven-year winning streak.
1. Newmont Corp. (NYSE:NEM):
Theworld’s biggest gold miner tops the list with a 2.24%average gain during the Santa Claus Rally and a 75% winning rate. Its best year was 2005, when shares climbed 10%. The worst showing came in last year, with a 2.46% decline.