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Wall Street History
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12/01/2006
Santa Claus
In the old days, the Santa Claus rally in stocks was defined as the
last five trading days of the year and the first two in January. In
more recent times the period keeps getting moved up and it’s as
if it now starts in November.
So we’ll compromise and look at the entire month of December,
instead, which also happens to be smack dab in the middle of the
best three months of the year.
For the S&P 500, for example, since January 1950:
November up 1.8%
December up 1.7%
January up 1.4%
For Nasdaq, since inception in 1971:
November up 2.2%
December up 2.0%
January up 3.7%
[Source: 2007 Stock Trader’s Almanac]
I’m throwing in the price of West Texas Intermediate crude
(WTI the common barometer you hear of when someone talks
about the price of oil in the U.S.), because December always
proves to be a key month here as well as traders jostle to figure
out the future winter weather pattern and the possible impact on
inventories.
December
S&P 500 11/30 – 12/31 full yr. performance WTI for Dec.
1997: 955 – 970 [+33.4%, total return] oil N/A
1998: 1163-1229 [+28.6] WTI: 11.28 – 12.05 [11/30 – 12/31]
1999: 1388 – 1469 [+21.0] 24.58 – 25.60
2000: 1314 – 1320 [-9.1] 33.83 – 26.83*
2001: 1139 – 1148 [-11.9] 19.48 – 19.78
2002: 936 – 879 [-22.1] 26.88 – 31.23
2003: 1058 – 1111 [+28.7] 30.33 – 32.55
2004: 1173 – 1211 [+10.9] 49.14 – 43.46
2005: 1249 – 1248 [+4.9] 57.33 – 61.04
*Back in 2000, OPEC set a preferred price band of $22-$28, but
thanks to demand factors oil rose to the $35 range. Western
leaders, in particular President Clinton, had been jawboning
OPEC to add more supply to the market to drive the price back
down. Clinton was concerned surging crude would hurt the
candidacy of Al Gore, and thus Clinton’s legacy. By year end,
votes already cast (and contested), OPEC finally opened up the
spigots and you see the result.
[Reminder: For any time period in question, since 1999, you can
always check my “Week in Review” archives for a look at the
overall environment back then.]
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Days of the Week
As the “2007 Stock Trader’s Almanac” notes, Monday used to be
the worst trading day of the week.
June 1952 – December 1989
S&P 500
Monday .up 44.3% of the time
Tuesday .51.6
Wednesday 57.0
Thursday 52.9
Friday 57.9
But then the pattern changed, though the last five and a half years
Monday and Friday have battled it out for worst-day-of-the-week
status.
January 1990 – June 2006
Monday .up 54.8% of the time
Tuesday . 49.7
Wednesday 54.0
Thursday 50.7
Friday 53.6
Nasdaq
1971 – 1989
Monday ..41.1
Tuesday ..51.1
Wednesday .62.7
Thursday .64.2
Friday ..67.3
1990 – June 2006
Monday 52.6
Tuesday 51.4
Wednesday ...57.9
Thursday ...54.8
Friday ...55.4
Additional Sources: StocksandNews.com archives, Energy
Information Agency
Wall Street History will return next week.
Brian Trumbore
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