Wall Street poised for Santa Claus Rally with positive historical data and economic factors

From Zacks Investment Research: 2024-12-20 09:42:54

Wall Street is up 24% year-to-date, poised for the Santa Claus Rally. Historical data suggests the rally has already started, but recent Fed cues caused a 3.3% dip in the SPY ETF. The Santa Rally typically yields a 1.4% gain in the S&P 500. Factors like investor optimism, institutional activity, and tax considerations drive this rally. Wall Street often performs strongly in December, with positive returns 74% of the time since 1928. Consistent retail sales growth and an annual U.S. GDP expansion of 3.1% reflect economic resilience, setting the stage for a moderate Santa Rally.

ETFs likely to benefit from the Santa Rally include the Roundhill Magnificent Seven ETF (MAGS), which features tech giants like Tesla and Amazon. The Amplify Travel Tech ETF (AWAY) includes airline and cruise stocks, with AAA projecting record-breaking holiday travel numbers. The Consumer Discretionary Select Sector SPDR ETF (XLY) is heavy on Amazon and Tesla, both of which have seen recent stock gains. The United States Natural Gas ETF (UNG) is set to benefit from increased demand due to cold weather and year-end energy adjustments.



Read more at Zacks Investment Research: Will Santa Claus Rally Set In for 2024? 4 Best ETF Areas to Explore – December 20, 2024