The Santa Claus rally arrived on time before vanishing for the rest of the week. Whether it returns to Wall Street in the coming days should have no bearing on how our stocks perform in the new year. The S & P 500 jumped 1.1% on Tuesday — the official start to the seasonally strong seven-session period known as the Santa Claus rally — but lost traction from there. The broad index ticked lower by 0.04% Thursday then slumped 1.11% Friday (the market was closed Wednesday for Christmas). Still, the S & P 500 held on to narrow weekly gains, adding 0.67% during the holiday-shortened four-day stretch. Energy, health care and financials were the S & P 500’s best-performing sectors in the week. Consumer staples and materials were the only two to finish in the red, dropping modestly. The Nasdaq Composite followed a similar trajectory to the S & P 500, advancing 0.76% for the week despite a bruising Friday in which the tech-heavy index fell 1.49%. Meanwhile, the Dow Jones Industrial Average ground out a 0.35% gain for the week. .SPX YTD mountain S & P 500’s year-to-date performance. We’ll see if Santa Claus reappears in the week ahead. The pool of potential catalysts is rather barren, with a light economic and corporate calendar. Still, for some market observers, this is an important stretch. Why? There are some investors who argue that the final five days of the year and the first two of January — the time period that encompasses the Santa Claus rally — guide the entire month of January’s performance, which in turn foreshadows what to expect for the rest of the year. We caution members from getting too negative if the next few days are weak. Seasonality trends aren’t always rational. They certainly aren’t based on fundamentals. And sometimes, the more one thinks about them, the sillier they become. Are we really supposed to be more sour on 2025 because equities didn’t advance during two holiday-shortened weeks of trading in which volume is typically low? Equities don’t rally one week, so therefore the following month is likely to be bad, and if the following month is bad, then the year isn’t going to be all that great either? Really? Everyone is entitled to their own view, of course. But at the Club, our focus is going to be on the fundamentals. Here are some facts on the ground that we know to be true: The U.S. economy has proven to be resilient. The incoming presidential administration prides itself on being pro-business. There’s been sustained demand for bullish secular trends, such as artificial intelligence, automation and reindustrialization. Fourth-quarter earnings season is on the horizon, bringing with it a fresh batch of management commentary that should matter far more to the market’s near-term performance than a handful of trading days around the holidays. There hasn’t been much to trade off in recent days, though we did right-size our Apple position on Thursday out of discipline. Looking back on the week, the only real economic report of note arrived Monday by way of November new home sales. They came up short of expectations, but still rose 5.9% on a seasonally adjusted basis, to 664,000. The news flow also was quiet within our portfolio. We have, however, started publishing some 2025 previews for core holdings. In the box below, members can find links to all of the ones we’ve published so far. In the week ahead, there are no major earnings reports expected and markets are closed Wednesday in observance of New Year’s Day. However, a pair of economic reports are on our radar. On Monday, we’ll get November pending home sales , with economists expecting to see a 1% month over month increase, according to FactSet. As Jim Cramer likes to say, housing punches above its weight in the U.S. economy, so we always keep a close eye on reports for that industry. And then on Friday, we’ll get the Institute for Supply Management’s December manufacturing report . Economists expect the contraction seen in recent ISM reports to continue pretty much at the same rate recorded in November. Keep in mind: This is one of those rare Fridays at the beginning of a month where we will not be getting the U.S. government’s nonfarm payrolls report. That will come the following week. Week ahead Monday, Dec. 30 10 a.m. ET: Pending Home Sales Tuesday, Dec. 31 No events of note. Wednesday, Jan. 1 U.S. market is closed for New Year’s Day Thursday, Jan. 2 8:30 a.m. ET: Initial Jobless Claims Friday, Jan. 3 10 a.m. ET: ISM Manufacturing (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
People take a selfie with the Christmas tree displayed outside the New York Stock Exchange (NYSE) on December 16, 2024.
Charly Triballeau | AFP | Getty Images
The Santa Claus rally arrived on time before vanishing for the rest of the week. Whether it returns to Wall Street in the coming days should have no bearing on how our stocks perform in the new year.
