The ‘Santa Claus’ Rally Has Begun


Thursday was another record-setting day on Wall Street, with the NAS Comp rallying 0.8% to cross the 9000 mark for the 1st time. The S&P 500 (+0.5%) and DJIA (+0.4%) also closed at new highs, thanks to mega-cap leadership and a strong finish into the close. The Russell 2000 finished flat. 

President Donald Trump’s stock market stacks up well against the majority of his Presidential predecessors.

The S&P 500 has returned more than 50% since Donald Trump was elected, more than 2X the 23% average market return of Presidents 3 years into their term, according to data from dating to Y 1928.

The Key index gained more than 28% this year, well above the average 12.8% return of year 3 for the past US Presidents.

Year 3 has been by far the best year of the cycle with an average gain of 12.81%, and the playbook has stuck to the script in year 3 of the current cycle.

President Trump’s 1st year was about 3X the Presidential average, with the S&P 500 gaining 19.4% compared with the average 5.7%.

Despite the volatility from the US-China trade dispute, Y 2019 has been a year of all-time highs for the major stock averages.

The S&P 500 crossed 3,200 for the 1st time ever last week, hitting its 7th round-number (high resistance) milestone of Y 2019. While business investment slumped due to uncertainty surrounding the world’s 2 largest economies, public market investors remained confident enough to put money into stocks.

Using history as a guide, President Trump is in for another strong year in Y 2020.

Stocks are up in year 4 more than 66% of the time and the S&P 500 returns an average of 5.7%.

President Trump will then need a 6% gainer in the S&P 500 to beat the average Presidential return. The odds are in President Trump’s favor, and his policies are winning,

Thursday, the major US stock market indexes finished at: DJIA +105.94 at 28621.30, NAS Comp +69.51 at 9022.41, S&P  500 +16.53 at 3239.91

Volume: Trade on the NYSE came in at 542-M/shares exchanged

  • NAS Comp +36.0% YTD
  • S&P 500 +29.2% YTD
  • Russell 2000 +24.4% YTD
  • DJIA +22.7% YTD

HeffX-LTN’s overall technical outlook for the US major stock market indexes is Very Bullish in here.

Investors will not receive any notable economic data Friday.

Have a Happy Holiday Weekend

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