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Wall Street History
https://www.gofundme.com/s3h2w8
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11/29/2002
Christ-mas-time.....is here...
The Holidays and Wall Street
We are now entering a period in the equity markets where two
trends sometimes come into play; the January Effect and the
Santa Claus rally.
The January Effect normally occurs from mid-December through
mid-January and relates to small cap stocks historically
outperforming large caps during this time of year.
The Santa Claus rally, traditionally, occurs during the last five
trading days of the year and the first two of the new one for all
stocks.
Both have become so well known among the investment
community, though, that in some respects these “old saw” have
been largely discounted, as the actual trading patterns have often
moved up in time. While I don’t have extensive data at my
fingertips on the large vs. small comparison, I thought I would at
least go back over the last five years and lay out the facts for the
broad-based S&P 500 over the full holiday period. You can then
draw your own conclusions, knowing, of course, that “event
risk” is a factor for today that seldom was in the past. 9/11
changed all that.
[Following are the Friday closing numbers for the S&P 500.]
2001-2002
11/16…1138.65
11/23…1150.34 [Thanksgiving 11/22]
11/30…1139.45
12/7…..1158.31
12/14…1123.09
12/21…1144.89
12/28…1161.02
1/4/02...1172.51
1/11…..1145.60
2000-2001
11/17…1367.72
11/24…1341.77 [Thanksgiving 11/23]
12/1…..1315.23
12/8…..1369.89
12/15…1312.15
12/22…1305.96
12/29…1320.28
1/5/01…1298.35
1/12…..1318.55
1999-2000
11/19…1422.00
11/26…1416.62 [Thanksgiving 11/25]
12/3…..1433.30
12/10…1417.04
12/17…1421.03
12/24…1458.34 [Market closed 12/24]
12/31…1469.25
1/7/00…1441.47
1/14…..1465.15
1998-1999
11/20…1163.55
11/27…1192.33 [Thanksgiving 11/26]
12/4…..1176.74
12/11…1166.46
12/18…1188.03
12/25…1226.26 [Market closed 12/25]
1/1/99…1229.23 [Market closed 1/1]
1/8……1275.00
1/15…..1243.26
1997-1998
11/21…963.09
11/28…955.40 [Thanksgiving 11/27]
12/5….983.79
12/12... 953.39
12/19…946.78
12/26…936.46
1/2/98…975.04
1/9……927.69
1/16….961.51
*The 11/29 edition of the Wall Street Journal reports that
over the past three years, the Russell 2000 small-cap index
outperformed the S&P 500 by an average of 6% in December,
and an additional 2% the following January.
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Wall Street History will return next week with a few thoughts on
gold. Following that, the exciting tale of the Erie Lackawanna
Railroad.
Brian Trumbore
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