The Upcoming December: A Time for Opportunity
The calendar has transitioned to December as investors anticipate a promising month historically known for its positive market performances. The S&P 500 index has experienced an average gain of approximately 1.4% every December since 1950, completing the month positively 73% of the time, making December one of the most rewarding months for investors.
Understanding December’s Market Trends
According to findings shared by Adam Turnquist, chief technical strategist for LPL Financial, stocks tend to either maintain stability or exhibit slight declines during the first half of the month, with a tendency to gain momentum around the 11th trading day. It’s notable that when the index sees a gain in December, the average advance is a remarkable 2.9%, hinting at the month’s bullish potential.
Key Stocks with December Momentum
Several S&P 500 stocks historically exhibit impressive gains during December, providing valuable investment opportunities. The following are seven stocks that have consistently performed well as the year closes, making them noteworthy additions to your investment watchlist.
Carnival Corp. (NYSE: CCL)
Carnival Corp. stands out with an impressive average December gain of 5.4% over the past 30 years, marking it as the strongest month for this cruise operator. With a winning rate of 67%, investors have seen notable fluctuations, including a dramatic 39.1% rise in shares in 1998, although the stock did face an 18.8% decline in 2022.
Royal Caribbean Group (NYSE: RCL)
Royal Caribbean cruises has similarly offered strong performances with an average increase of 4.4% during December across three decades. With November typically outpacing December, it still shows a 57% winning rate. The peak performance occurred in 2008 with a 46% rise, whereas its most significant drop happened in 2002, seeing a decline of 23%.
Western Digital Corp. (NASDAQ: WDC)
This tech stock has generated an average December gain of 4.66% over 30 years, and sees a winning rate of 67%. Historically, January and November are slightly stronger, yet December remains a solid month for Western Digital. The most remarkable year was 2001, when shares skyrocketed by 33.1%, juxtaposed with a 25% decline in 2000.
Seagate Technology Holdings PLC (NASDAQ: STX)
Seagate has enjoyed an average rise of 4.2% each December since 2002. This month subsequently ranks second only to November for the data storage company, boasting a 64% winning rate. The best December performance was recorded in 2012 with a 21.2% gain, while 2023 proved challenging with a 14.8% decline.
Mohawk Industries Inc. (NYSE: MHK)
For Mohawk Industries, December is the best month for gains, showing an average increase of 4.1% with a consistent 60% winning rate over the past 30 years. The strongest showing in December was in 2008 with a 39.79% jump, but faced a notable decline of 14.19% in the previous year.
Eli Lilly & Co. (NYSE: LLY)
In the pharmaceutical sector, Eli Lilly averages a 3.1% gain each December, ranking third after June and November. The high point in December was in 2008, which saw a rise of 17.9%, in contrast to a downturn of 7.3% in 1999.
Do Financials Participate in December’s Gains?
Key financial institutions have shown persistent gains as December approaches. The Goldman Sachs Group Inc. (NYSE: GS) averages a December increase of 3% since 1999, making it the third-best month following October and July, highlighted by a remarkable 30.2% surge in 2000. However, it also faced a 13.7% drop in 2002.
JPMorgan Chase & Co. (NYSE: JPM)
JPMorgan has fared slightly lower, with an average December gain of 2.5% over the past thirty years, making it the second-best month after October with a 57% success rate. Notably, the stock experienced its greatest increase in 2000 with a jump of 23.2%, in contrast to a lesser decline of 5.4% in 1996.
Considerations Going Forward
As December unfolds, investors should keep a close eye on these stocks and their performance potential. The collective historical data suggests that the likelihood of December being a fruitful month for these companies remains high. Evaluating market conditions and stock performance will be key in making informed investment decisions.
Frequently Asked Questions
What is the average gain for the S&P 500 in December?
The S&P 500 has historically averaged a 1.4% gain during December.
Which stock has the highest December gain on average?
Carnival Corp. has the highest average gain in December, recording about 5.4% over the past 30 years.
How often does the S&P 500 finish December positively?
The S&P 500 finishes December positively 73% of the time, reflecting a strong performance trend.
What financial stocks are noted for December gains?
Goldman Sachs and JPMorgan Chase are two significant financial stocks that have demonstrated reliable December performance gains.
What sectors show strong December performance?
Cruise operators and tech hardware companies notably show strong historical performance during December.
