Futures are pointing to a lower open on Wednesday as stocks continue to struggle during a historically strong period for the S&P 500 (^GSPC).
Since 1950, the S&P 500 has risen 1.3% during the seven trading days beginning Dec. 24, well above the typical seven-day average of 0.3%, according to LPL Financial chief technical strategist Adam Turnquist. History has shown that if Santa does come and the S&P 500 posts a positive return during the time period, then January is typically a positive month for the benchmark index and the rest of the year averages a 10.4% return.
When the S&P 500 is negative during that time frame, January usually doesn’t end in the green, and the return for the upcoming full year averages just 5%, per Turnquist. Three days into this year’s Santa Claus period, which will close on Friday, Jan. 3, the S&P 500 is down less than 0.1%
While history may be flashing a warning sign, it’s notable that last year the Santa Claus rally didn’t materialize. January started poorly too. Still, the S&P 500 is still set to end the year up more than 20%.
