about 2 years ago • 1 min
December has historically been the quietest month for US stock markets as investors hunker down for the holiday season. But concern about the Omicron coronavirus variant and central banks’ moves to remove stimulus has flipped the script this year.
The chart above shows how S&P 500 price swings (in dark blue) have surged this month, whereas they tend to fall at this time of year (as shown in light blue).
Slicing the data a different way, the chart below shows how each month of 2021 has compared to its average over the past seven decades. The S&P 500 has posted an average daily move of 1.07% so far this December, nearly double the long-term trend.
The good news, according to Bespoke Investment Group’s analysis, is that a nervy December doesn’t necessarily bode ill for the future. Following the last five occasions when December was the most volatile month of the year, the S&P 500 went on to record an average gain of 2.9% the following January and 9.3% the following year.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.