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That Elusive 2021 Santa Claus Rally: Has it finally arrived on Wall Street?

Written By | Dec 27, 2021
2021 Santa Claus Rally, Celebrate Christmas with NFL Holiday Football

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WASHINGTON – To my great surprise, Mr Market has spent his time popping champagne corks for days. Apparently aware, finally, that the Christmas and New Years holiday seasons were already upon us, he and his cohorts arrested stocks’ late-year arrested development stage and decided to rally. Strongly. And just in time to take back at least a few days of the 2021 Santa Claus Rally that wasn’t. Until it was.

Maybe investors are still hosed. Maybe the bears are set to return in the three remaining trading days before the Friday New Years Eve holiday ending this week also brings an end to 2021 market action.

It’s hard to say. But after a heavy tsunami of sturm und drang in US markets late in Q4, it looks like US stocks might actually wind things up on a high note this week.

Fingers crossed

As already implied, the bears already have 3 days to destroy the fun and shatter all remaining bottles of champagne.

But, as for now, at 2 p.m. Monday at least, the raging bull and the 2021 Santa Claus Rally are back in charge on Wall Street. Perhaps the huge wave of tax loss selling and ruthless, bearish shorting are over. The former, because that selling has concluded. The latter because this surprisingly late excuse for a Santa Claus Rally caused a long-overdue short-squeeze, sending Mr Market into his current frenzy of celebration.

Whatever the reason, we’ll take whatever 2021 Santa Claus Rally we can get. It helps make up for all the red ink that nearly bled out our various accounts in recent weeks. Probably helped your accounts as well.

Current market averages

The Dow is currently up 273 points (+0.73%). The tech-heavy NASDAQ is up a whopping 192.64 points (+1.23%). And the broad-based S&P 500 is also up, gaining 54.14 points (+ 1.14%). These gains may or may not hold entirely until today’s 4 p.m. market close. But as this year draws to a close, we’ll take whatever percentage gains we can snag before our brief, long-delayed 2021 Santa Claus Rally comes to an end.

The only negative today? Our preferred stocks, baby bonds, and defensive investments (like utilities) are a bit off today, given the rising fear of a Fed-induced 2022 recession caused by that long-awaited (and dreaded) series of interest hikes the nation’s central bankers promised us in mid-December. We’ll see if this persists into 2022. If so, we’ll need to re-examine our over all investing strategy next year. And make adjustments if needed.

Light column schedule this week

Columns will be rare and relatively brief this week as we take an extended breather from our usual schedule. But we’ll be back with our annual year-end bounce back stock candidates later in the week. And we’ll also provide our usual holiday heads up for the New Years trading schedule, just like we did for the Christmas holiday weekend last week.


Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17