Will We See A Santa Rally In 2019?

December is here once again and the question many investors will be asking is will we see seasonal gains this month, or a ‘Santa Rally’ as it is often referred to. Recent analysis by Fidelity International has shown that the FTSE100 index has generated a positive return for the month of December in 25 of the last 30 years.

Last year was one of the rare occasions that the performance was negative, due to uncertainty caused by US-China trade and Brexit. One could argue the market faces both of these very concerns again this year, although the outlook could be very different. The trade-war mood is a lot more optimistic with many seeing some sort of accord as more than feasible. In addition to this, a decisive result in the UK general election next week could put to bed a lot of the questions surrounding Brexit. It will be interesting to see how it plays out.

Link: Your Money

Spotlight on consumer spending as Black Friday kicks off holiday season

The major US indices returned to positive form last week, with the Nasdaq Composite climbing close to 2%, plus gains of around 1% for the S&P 500 and Dow Jones Industrial Average. Amazon’s (AMZN) share price climbed more than 3% over the course of the week. Investment firm T. Rowe Price put down to favorable online shopping trends as the holiday season kicked off with Black Friday (for more Black Friday reading, try this from Reuters). Edward Jones, another investment firm, painted a rosy picture for consumer spending over the next year. It highlighted that since 1950 there have been 16 years when the unemployment rate was below 4.5% at Thanksgiving, followed by an average 3.1% consumer spending increase and 9.9% S&P 500 return in the following year – with zero instances of consumer spending contracting. Economic data reported last week was less optimistic, with US consumer confidence falling for the fourth consecutive month. In the ongoing US-China trade saga, it was another week of conflicting information. At the start of the week China announced it would crack down on intellectual property theft, one of the sticking points in the trade talks. This was followed by US lawmakers signing legislation on Wednesday supporting the Hong Kong protestors, potentially throwing a spanner into the negotiations.

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Stock Fan 1 week ago Member's comment

There better be a santa rally. I'm counting on one!