Three Things to Know & Watch – 27 Dec, 2022

By Bill Hornbarger, Chief Investment Officer

Three Things to Watch

  • The so-called Santa Claus Rally is a seasonal pattern that has seen the stock market make gains the last week of the year and the first two trading days of the new year. Stocks have averaged a 1.4% gain over this time frame since 1969, with 75% of the years posting positive returns. This year the Santa Claus Rally will run headlong into concerns over the new Omicron variant of the COVID-19 virus, which will be the focus of the markets.
  • The data calendar is light this week, highlighted by pending home sales (consensus 0.6%), jobless claims (210,000), and the Chicago regional manufacturing data (62).
  • As befitting a holiday week, both the earnings and corporate calendars are light. The highlight is a Metaverse event on Monday from Chinese tech giant Baidu.

Three Things to Know

  • The National Retail Federation (NRF) predicts a 13% year-over-year increase in online sales during the 2021 holiday season (November and December) to $222.3 billion. (Source: CBRE Research)
  • The period between Christmas and the New Year typically sees about 30% lighter trading volume than normal and some gentle stock price gains amid window dressing moves from fund managers. (Source: Seeking Alpha)
  • 2021 will be the third consecutive year of gains for the domestic equity markets. The last time the markets made four consecutive years of gains was 1999. (Source: CNBC)

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.