Santa Claus rally

A surge in the price of stocks that often occurs in the week between Christmas and New Year's. There are numerous explanations for this phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses and the fact that the pessimists are usually on vacation this week.

Investopedia Says:
Many consider the Santa Claus rally to be a result of people buying stocks in anticipation of the rise in stock prices during the month of January, otherwise known as the January effect.

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Rise in stock prices in the week between Christmas and New Year's Day. Also called the year-end rally. Some analysts attribute this rally to the anticipation of theJanuary Effect when stock prices rise in the first few days of the year as pension funds add new money to their accounts.

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A Santa Claus rally is a rise in stock prices in the month of December, generally seen over the final week of trading prior to the new year. The rally is generally attributed to anticipation of the January effect, an injection of additional funds into the market, and to additional trades which must, for accounting and tax reasons, be completed by the end of the year. The Santa Claus rally is also known as the "December Effect."

See also

First recorded by Yale Hirsch in his Stock Traders Almanac.

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