Santa Finally Arrives On Wall Street: ETFs & Stocks To Bet On

After days of painful losses, the Wall Street made a roaring comeback post-Christmas. This is especially true as the Dow Jones rallied more than 1,000 points (up almost 5%) on Dec 26, marking the largest single-day point gain in the history. The S&P 500 also climbed nearly 5% while the Nasdaq Composite recorded its best performance since March 2009, climbing about 5.8%.

The outstanding performance came on the report that this holiday season is the strongest in six years with an e-commerce bonanza and surge in last-minute shopping. Total U.S. retail sales, excluding automobiles, rose 5.1% year over year between Nov 1 and Dec 24 per MasterCard Advisors' SpendingPulse. Overall, U.S. consumers spent more than $850 billion this holiday season. In particular, e-commerce giant Amazon (AMZN  - Free Report) led Wall Street higher after the company announced a record-breaking holiday season.

Additionally, energy stocks rebounded sharply with a spike in oil prices, which jumped about 8% on Dec 26, marking their largest one-day increase in two years. Big gains followed after reassurance by Russia’s energy minister Alexander Novak that the oil market will be more stable in the first half of 2019 as OPEC with its allies strengthened its cooperation.

Moreover, the American economy is on track this year to expand at the fastest pace in 13 years, thanks to robust job creation, strong GDP growth, a 50-year low unemployment rate, solid wage gains, as well as rising consumer and business confidence.

The flow of positive news and the resultant impact on the stock market suggest that Santa Claus has finally arrived in Wall Street. A Santa Claus rally refers to the increase in stock prices in the final week of the calendar year (i.e. between Christmas and New Year’s Day) that extends into the first two days of the New Year.

In the past five decades, the final week of the year and the first couple of trading sessions in January registered more than 1%gain. Since 1928, the S&P 500 has recorded an average gain of 1.7% and posted positive returns 78% of the times in the rally period, according to data provided by Ari Wald of New York-based investment firm Oppenheimer.

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