Core Insights - The S&P 500 experienced a strong performance throughout the year despite the absence of a traditional year-end rally known as the "Santa Claus rally" [1] Group 1 - The S&P 500 had another fantastic year, indicating robust market performance [1]

Key Points The Santa Claus rally looks at market returns during the last five trading days of December and the first two of January. Historically, the S&P 500 generated positive returns during this period nearly 80% of the time. This year, however, the Santa Claus rally is sending a warning. 10 stocks we like better than S&P 500 Index › The holidays aren't just a time for people to celebrate. Holidays are a time for the markets to celebrate, too. The "Santa Claus rally," which looks at the perf ...

Core Insights - The Santa Claus rally, which typically sees stock prices rise during the last five trading days of December and the first two of January, did not occur this year, with the S&P 500 down 0.11% during this period [1][9] - This marks the third consecutive year without a Santa rally, while historically, the S&P 500 has averaged a return of 1.3% during this rally period since 1950 [2] Market Outlook - Some investors are concerned that the S&P 500 may not achieve the high returns seen in recent years, although some strategists believe there is no immediate reason for pessimism [3] - Major institutions have set relatively modest annual targets for the S&P 500 for 2026, suggesting a less optimistic outlook for U.S. stocks [3] Historical Context - The absence of a Santa rally in previous years, such as 2000 and 2008, preceded significant market downturns, with a 4% decline in 2000 leading to the tech bubble burst and a 2.5% loss in 2008 resulting in one of the worst bear markets [4] - Analysts are cautious, with some suggesting that negative performance in the first five trading days of January could negatively impact the outlook for 2026 [5] Investor Sentiment - Despite the lack of a Santa rally, some analysts, like Mark Newton from Fundstrat, view the recent small breakout in the S&P as a positive sign, potentially leading the index back above 7000 [7] - Jessica Rabe from DataTrek advises against overinterpreting January's performance, noting that historically, a positive January often correlates with stronger annual returns [8]

Core Viewpoint - The anticipated Santa Claus rally did not occur, but January has started positively for certain technology companies [1] Group 1 - The performance of tech stocks has shown signs of recovery at the beginning of January [1]

Core Viewpoint - U.S. stocks experienced a significant rebound at the start of the first full trading week of the new year, reviving the Santa Claus rally that had been at risk of not occurring this year [1] Group 1 - The stock market's recovery was timely, suggesting a positive sentiment among investors as the new year begins [1] - The rebound indicates potential optimism in the market, which could influence trading strategies moving forward [1]

Market Performance - Wall Street's main indexes surged, with the Dow Jones Industrial Average hitting an all-time high of 49,095, up 713 points or 1.5% [1] - The S&P 500 gained 0.8%, while the Nasdaq climbed more than 200 points or 1% to 23,458 [1] Sector Performance - The S&P's energy index rose by 1.3%, with Exxon Mobil and Chevron increasing by 1% and 4% respectively [3] - Defense-related stocks advanced, with Lockheed Martin rising 2.5% and General Dynamics climbing 2.8%, contributing to a broader aerospace and defense index gain of 1.2% [3] - Goldman Sachs jumped 4.75% to a record high, while JPMorgan Chase and American Express rose by 3% and 2.6% respectively [3] Investor Sentiment - Investors are optimistic that the U.S. military action against Venezuela's leadership will allow American firms access to the world's largest oil reserves [2][7] - The market's stability in the tech sector, which was previously sold off, saw a slight increase of 0.2%, with Nvidia adding 0.6% and Tesla rising 4.2% after seven consecutive losses [5] Economic Indicators - The upcoming monthly nonfarm payrolls report is anticipated to influence the Federal Reserve's monetary policy, with markets pricing in about 60 basis points of interest rate easing this year [9]

Market Overview - Futures are trading higher as the first full week of trading in 2026 begins, with the S&P 500 closing at 6,858, up 0.19%, and the Dow Jones up 0.66% at 48,382, while the Nasdaq closed slightly lower at 23,235 [2] - Analysts expect heightened volatility in 2026 after three consecutive years of double-digit gains for the S&P 500 [2][5] Treasury Bonds - Treasury yields increased on Friday, with the 30-year bond closing at 4.87% and the benchmark 10-year note at 4.20%, down from 4.80% a year ago, marking the first annual decline in yield in five years [3] - Traders are anticipating a significant amount of economic data and do not expect another rate cut until possibly summer, which may lead to higher yields in the near term [3] Oil and Gas - Oil prices were modestly lower, with Brent Crude down 0.16% at $60.75 and West Texas Intermediate down 0.17% at $57.32, following a year where oil prices hit five-year lows [4] - Expectations for WTI are to trade in the $55-$60 range this year, with potential volatility due to the recent capture of Venezuelan President Maduro [4] - Natural gas prices fell 1.8% to $3.62, coinciding with a record U.S. LNG production of 100 million tons in 2025 [4]

Group 1: U.S. Military Action in Venezuela - Approximately 15,000 personnel were involved in the raid to capture Venezuelan President Maduro [1] - U.S. troops are expected to be stationed off Venezuela's coast, but the duration of their presence remains unclear [1] - President Trump stated that the U.S. would "run" Venezuela and stabilize the government to resume oil production [3] Group 2: Impact on Financial Markets - The capture of Maduro has led to a boost in stock futures, with the Dow Jones up about 30 points and Nasdaq-100 futures up 98 points [5][7] - The S&P 500 ended the previous week down 1%, while the Nasdaq fell 1.5% and the Dow decreased by 0.7% [13] - The market had previously experienced a bullish year in 2025, with the S&P 500 up 16.6% and the Nasdaq up 20.4% [13] Group 3: Venezuela's Oil Reserves - Venezuela holds the world's largest proven oil reserves, estimated at 300 billion barrels, surpassing even Saudi Arabia [9] - Oil production in Venezuela has declined by approximately 70% since 2000 due to various factors including corruption and mismanagement [11] - Trump indicated that U.S. companies would be invited back to manage Venezuela's oil resources, which were previously controlled by them until expropriated in 1976 [11] Group 4: Economic Outlook and Reports - Upcoming economic reports, including job growth and consumer confidence, are expected to influence market reactions to the situation in Venezuela [19][20] - The unemployment rate increased to 4.7% from 4.6% in November, with job creation dropping to about 54,000 from 64,000 [22]

Core Insights - The S&P 500 index is on track to decline for the third consecutive year during the traditional "Santa Claus rally" period, which has never occurred before [1][3] - Analysts suggest that this does not necessarily indicate the end of the bull market, as historical data shows mixed results regarding the implications of a weak Santa Claus rally [2][3] Market Performance - The Santa Claus rally period includes the last five trading sessions of the previous year and the first two of the new year, starting on Christmas Eve; during this period, the S&P 500 has fallen by 0.9% [3] - Since 2013, the Santa Claus rally has produced positive returns only 66.7% of the time, compared to a historical win rate of 76% since 1950 [3] Seasonal Trends - Recent years have shown inconsistent post-Christmas seasonal strength, with poor returns over the past 12 years not necessarily foreshadowing a bear market in the following year [4] - The performance of the S&P 500 during the first five trading days of January has historically correlated with full-year gains, averaging 14.2% after positive initial sessions, with an accuracy rate of 83.3% since 1950 [6] Future Indicators - Investors will also be monitoring the "January barometer," which suggests that early-year market strength or weakness can influence the rest of the year [7]

Core Viewpoint - The S&P 500 is expected to decline for the third consecutive year during the "Santa Claus rally" period, a phenomenon that has never occurred before [1] Group 1 - The S&P 500's potential decline during the holiday season indicates unusual market behavior [1]