Week ahead: Santa Claus rally and holiday season take centre stage

    by VT Markets
    /
    Dec 26, 2023

    With no high-impact news expected, the market’s attention will be focused on the holiday season this week. Investor sentiment is likely to be influenced by holiday festivities, resulting in increased shopping activity and the investment of holiday bonuses. Additionally, the end-of-year period typically coincides with institutional investors going on vacation, leaving the market in the hands of comparatively bullish retail investors. This phenomenon, known as the Santa Claus rally, is expected to occur in the last week of December.

    Holiday-related factors aside, here are several other medium-impact market indicators to watch for in the last week of 2023:

    US unemployment claims (28 December 2023)

    The number of Americans filing for unemployment benefits increased by 2,000 to 205,000 in the week ending 16 December, staying close to the 2-month low of 203,000 seen in the previous week.

    Analysts expect a further rise to 207,000 in the week ending 28 December.

    US pending home sales (28 December 2023)

    Following a 1% rise in September 2023, pending home sales in the US dropped 1.5% month-over-month in October, marking the lowest level since records were first kept in 2001.

    Analysts expect a 0.5% increase in the figures for November, set to be released on 28 December.

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