The Santa Claus Rally, Explained

Today is Tuesday, December 7, 2021.

The Santa Claus Rally, Explained

As we approach the end of 2021, investors are hoping for a Santa Claus Rally.

Definition: A Santa Claus rally is when the stock market experiences a big jump during the final weeks of December into early January.

Data: Since 1993, the SPDR S&P 500 ETF Trust has produced a Santa Claus rally 68% of the time, according to Investopedia.

Catalyst: Analyst says that a Santa Claus rally typically happens so that investors can recover from a bad year. Liquidity from end-of-bonuses and tax considerations are among the reasons for this trend.

Final Thoughts: While there could be a Santa Class rally in 2021, some investors are skeptical due to the impact of the pandemic and inflation.

Notables

Notable Earnings Today: AutoZone (NYSE: AZO), Toll Brothers (NYSE: TOL), Dave & Buster's Entertainment (Nasdaq: PLAY), Stitch Fix (Nasdaq: SFIX), AeroVironment (NYSE: AVA), Casey's General Stores (Nasdaq: CASY), Conn's (Nasdaq: CONN), Designer Brands (NYSE: DBI).

Notable IPOs Today: APx Acquisition Corp. I Unit (Nasdaq: APXIU), Jupiter Wellness Acquisition Corp. Unit (Nasdaq: JWACU), Vacasa, Inc. Class A Common Stock (Nasdaq: VCSA), Lionheart III Corp Class A Common Stock (Nasdaq: LION), Globalink Investment Inc. Unit (Nasdaq: GLLIU), Baker Hughes Company Class A Common Stock (Nasdaq: BKR).

Notable Equity Crowdfunding Campaigns Ending Today: Knowledge as a Service (Wefunder), Hiveskills (Netcapital), Carmmunity (Silicon Prairie Online), Chip’s Chop Shop (Honeycomb).

Notable Economic Events Today: Trade deficit (8:30 a.m. ET), Nonfarm productivity (8:30 a.m. ET), Unit labor costs (8:30 a.m. ET), API weekly crude oil stock (4:30 p.m. ET).

CME Group Welcomes Micro Ether Futures

Derivatives marketplace Chicago Mercantile Exchange (CME) Group rolled out a micro Ether futures product on Monday.

Details: The micro Ether futures product is sized as 1/10 of one Ether and has lower margins, according to the CME Group.

Background: Earlier in 2021, the CME Group introduced a micro Bitcoin futures product for investors. These futures products allow investors to get exposure to an asset class without owning the underlying asset.

Numbers: While Ether is up in 2021, the cryptocurrency is down over the last few weeks. This was after hitting a record high earlier in November.

Final Thoughts: Crypto investors have mixed feelings about futures. Some investors like them and others prefer the actual assets instead.

DraftKings Soars 8% Against Short-Seller

Shares of DraftKings (Nasdaq: DKNG) jumped 8.14% on Monday as retail investors piled into the stock to fight off a short-seller.

Details: Last week, investor Jim Chanos opened a short position against DraftKings. Chanos contends that the stock is overvalued and cites the company’s high marketing spend as a problem.

Numbers: Last year, DraftKings was one of the darlings of Wall Street, with shares soaring over 300%. This year, shares of DraftKings are down 31.61%. Most of the losses have come in the last few weeks.

Half Glass Full: While DraftKings is spending a lot of marketing, the sports betting company seems to be gaining good ground as states across the U.S. ease gambling laws.

Final Thoughts: Investors bought DraftKing’s dip on Monday, but buyer beware: The company reported bad earnings last month.

Trends to Watch

Buzzkill: BuzzFeed Shares Drop in Volatile First Trading Day After SPAC Merger (The Wall Street Journal)

Running on Empty: Halliburton says the world is entering a period of oil scarcity (Reuters)

Valuable Prediction: 2022 is when investors will finally return to value stocks. Really (CNN)

Mark Your Calendars: Xpeng is 'very likely' to rise over the next 15 days - Morgan Stanley (Seeking Alpha)

Crypto Meets Real Estate: THesis Miami Raises $33M From Retail Investors With Plan to Tokenize (Commercial Observer)

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