The Stock Market Is Ending the Year With a Strong December. Here’s What History Says Happens Next.

The Stock Market Is Ending the Year With a Strong December. Here’s What History Says Happens Next.
Share

It really does look like its going to be a happy New Year, even with the stock market down Monday.

Yes, the S&P 500 is off 0.4% to 3225.99, but it is still up 2.7% in December. If it holds that level, it will be the 19th time since 1950 that the index has gained 2.7% or more during December.

Which got us wondering: How does the stock market perform after a strong December? Quite well, actually. When the S&P 500 has gained 2.7% or more in December, it has average a 0.9% rise in January—and finished higher just over two-thirds of the time. That suggests that a January selloff isn’t quite as likely as headlines might suggest.

History suggests that market is even more likely to head higher in the year after a strong December close. The S&P 500 has averaged a 7.9% rise during those years, pretty close to the index’s average gain, and has finished higher just under three-quarters of the time. That would suggest that the odds of a 2020 selloff are lower than this columnist suggests.

 

Source: Barrons

Submit a Comment

Skip to toolbar