What to Expect in the Markets This Week

News

This week is expected to be short for investors with markets closing on Monday, December 25 in observance of Christmas. However, it may bring a lot of movement as many investors hope for a “Santa Claus rally” to close out the last trading week of the year on a high note. Bond markets will close early at 2 PM on Friday, December 29.

Market News

There aren’t many economic releases scheduled during the holiday week, but some may highlight the state of the housing market in the U.S. The S&P Case-Shiller Home Price Index and data from the National Association of Realtors about pending home sales are set to be released. Weekly unemployment claims are also scheduled for release, along with inventory and trade balance data.

What to Expect in the Selling Season

It’s the last week of the 2023 holiday sales season, and retailers are expected to offer deals to clear out inventory. Tuesday, December 26 is expected to be the sixth busiest day of 2023 when stores reopen, with retailers such as Amazon, Nike, and Target planning to launch post-Christmas sales. Saturday, December 30 will also be a popular shopping day, expected to be the ninth busiest of the year.

Housing Data Arrives Amid Improving Market

After a series of reports indicating improvement in national housing conditions, the S&P Case-Shiller Home Price Index being released on Tuesday could provide insight into the latest trends in affordability. On Thursday, the Realtors Association will also release the latest data on pending home sales, a gauge of future market conditions, which follows the last report on existing home sales that rose 0.8% in November. Recent housing market data relies on increasing confidence in home building, which rose in December for the first time in four months.

Will There Be a Santa Claus Rally?

While there are no guarantees, it’s possible that the markets may get a boost from a “Santa Claus rally” during the last trading days of the year. Since 1945, the S&P 500 has risen during the last five trading days of the fiscal year and the first two days of the new year 77% of the time, according to CFRA research. There are no definitive explanations for this seasonal trend, but holiday shopping, seasonal optimism, and institutional investors settling their books have been cited as potential contributing factors.

Article Sources

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Article Sources

Sensormatic Solutions. “Sensormatic Solutions predicts the global top busiest shopping days of the 2023 holiday season.”
DealNews. “What to Expect From After Christmas Sales in 2023.”
CFRA. “Anticipating Indicators.” (Document not hosted online)
J.P. Morgan. “What is the Santa Claus rally?”

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