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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael Thompson,

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Speaker 1: and good afternoon, Sean Aylmer.

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Speaker 2: Good afternoon, Michael. Sean.

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Speaker 1: Questions can come in from anywhere and from anyone. They

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Speaker 1: can come in via our website Fearangreed dot com, dot au,

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Speaker 1: or LinkedIn or Instagram. This one's come from Facebook, and

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Speaker 1: it has come from Ruth on Facebook. And Ruth wants

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Speaker 1: to know, she says, a couple of times recently, I've

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Speaker 1: heard a Santa rally mentioned. Is this a formal thing?

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Speaker 1: Is there a definition or criteria for it to be

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Speaker 1: classed as a Santa rally? Or is it just a trend?

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Speaker 1: Maybe we start with the basics, Sean, what is the

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Speaker 1: Santa rally?

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Speaker 2: Well, you sort of have to answer it by saying

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Speaker 2: it's a trend. There's nothing officially that's a Santa rally.

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Speaker 2: I had to go back and look. So in nineteen

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Speaker 2: seventy two, the Stock Traders Almanac by Yale Herb used

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Speaker 2: to talk about the phenomenon of like the sustained increase

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Speaker 2: in the stock market in the last week of the year.

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Speaker 2: So the last five trading days and the almanacurs I

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Speaker 2: talked about the first two trading days of the next year,

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Speaker 2: and that's kind of where it came because there is

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Speaker 2: no doubt that markets rally at the very end of

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Speaker 2: the year. In fact, historically the S and P five

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Speaker 2: hundred and the down Joy's industrial average and the negs

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Speaker 2: that composite have risen eighty percent of the time in

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Speaker 2: those final five days, So it is a real thing. Now.

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Speaker 2: Often people want their bottom line to look better at

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Speaker 2: the end of the year. There could be a lot

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Speaker 2: of trading to close our positions, I mean, sort of

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Speaker 2: reasons for it. But eight percent of the time there

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Speaker 2: is a rally in those five days. Now, the average

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Speaker 2: returns are about one point three one point four percent basically.

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Speaker 1: Okay, So obviously there's if it's just a trend, there

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Speaker 1: are exception then, and one would expect that perhaps this

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Speaker 1: week Sean might be an exception to the rule where

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Speaker 1: all of a sudden you've got the FED coming in

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Speaker 1: and really dampening everybody's spirits.

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Speaker 2: Yes, so we're not quite at the Santa Claus rally yet,

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Speaker 2: because it's the last five days literally of the year,

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Speaker 2: the last five trading days. What I think is kind

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Speaker 2: of interesting is that last year there's a rally right

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Speaker 2: at the last, like a pretty steep rally. I think

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Speaker 2: we're around seventy five hundred points, and we only got

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Speaker 2: to seventy six hundred points, so it rallied about one

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Speaker 2: hundred points in that last five days or so this year.

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Speaker 2: So this week, because of what the FED did, certainly

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Speaker 2: been sold off, so we can't. I mean often when

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Speaker 2: you hear commentators now, they talk about at Santa Rally,

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Speaker 2: and they're actually talking about the month of December. Officially,

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Speaker 2: it's only the last five days though, and certainly what's

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Speaker 2: happened in the past sort of forty eight hours as

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Speaker 2: they suggest, we won't have a Santa Rally for December.

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Speaker 2: We may not anyway, but really it is actually the

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Speaker 2: last five days that matter.

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Speaker 1: So if it's the last five days of December, then

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Speaker 1: Sean arguably like it's it's typically then after Santa has

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Speaker 1: been So therefore I'm proposing that we rename the Santa

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Speaker 1: Rally to like the New Year's Baby Rally or whatever

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Speaker 1: they what do they call it, Baby New Year? I

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Speaker 1: don't know, whatever it is, whatever the character is associated

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Speaker 1: with the New Year. Name it after that, it's after

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Speaker 1: Santa like it's it's.

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Speaker 2: To honest peak at the public holidays and stuff like that.

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Speaker 2: You're only normally there's a weekend in there, so maybe

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Speaker 2: two in sane it's about halfway through the rally, That's

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Speaker 2: how I put it.

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Speaker 1: So it's a shared rally between shared baby.

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Speaker 2: Yeah, yeah, yeah, yep, yep, yep yeah.

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Speaker 1: All right, well, okay, so it is slightly misnamed. It

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Speaker 1: is not a fixed thing, it is not guaranteed, and

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Speaker 1: it is based essentially on the last five days of

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Speaker 1: the year typically, but it does it's now kind of

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Speaker 1: generally referring to the full month almost, yes, exactly right, Okay,

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Speaker 1: all right, well, I think Ruth's question has been answered.

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Speaker 2: I think I did.

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Speaker 1: I did my best to hijacket with a renaming after

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Speaker 1: a baby, but it was unsuccessful in that. So thank

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Speaker 1: you very much Sean for answering the question, and thank

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Speaker 1: you Ruth for asking it.

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Speaker 2: Thank you Michael.

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Speaker 1: If you have your own question that you would like

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Speaker 1: us to answer, then please send it on through via

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Speaker 1: the website Fearangreed dot com, tod au, or go to

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Speaker 1: LinkedIn or follow Fear and Greed on Instagram or send

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Speaker 1: it on through via Facebook as Ruth did. I'm Michael

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Speaker 1: Thompson and this is ask Fear and Greed