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“I think the one lesson I have learned is that there is no substitute for paying attention.” – Diane Sawyer

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

The year is finally starting to wind down as the pace of economic data, earnings results, and analyst actions slows down to a trickle, if at all.  This morning, traders are in a buying mood as S&P 500 futures trade 0.4% higher while the Nasdaq is up 0.65%. Bond yields are modestly higher as crude oil jumps 2% following reports that the US has seized another Venezuelan oil tanker. Even with that move, though, WTI still trades below $58 per barrel, so those sub=$3 gas prices should be safe for now.

The real action this morning, though, is coming from the metals markets. Gold and silver are trading to new highs with gains of 1.5% and 2.5%, respectively. Platinum prices are blowing those rallies out of the water, though, surging more than 5% to its highest level since 2008 and within 8% of its record high. Even crypto prices are joining in on the rally to kick off the week as Bitcoin is back above $90K.

Asian stocks had a rough go of it last week, but they’re in the holiday mood to start this week. South Korea led the way higher with a gain of 2.1%, followed by the Nikkei, which rallied 1.8%. Other major benchmarks in the region were also higher, but by less than 1%. Yields in Japan continue moving higher, but the Yen managed to rally.

In terms of holiday cheer, there isn’t much in Europe to start the week. The STOXX 600 is down fractionally, with the UK and France leading the way with losses of about 0.5%.

It’s called the most wonderful time of the year, but is it for the stock market? The chart below shows the S&P 500’s historical returns during Christmas week since 1945.  For each year, we measure the S&P 500’s performance during the week when the Christmas holiday was observed. For all years since 1945, the S&P 500’s average gain was 0.53% with positive returns 66% of the time.  For all one-week periods since 1945, the S&P 500’s average gain was 0.30% with gains 57% of the time, so Christmas week may not be the “most wonderful”, but it’s much better than average. The best Christmas week for the S&P 500 was in 1991, when it rallied just over 5%, while the worst Christmas week was in 2002 (-2.3%).

Looking at different scenarios applicable to this year, in the 30 years when the S&P 500 was up 15%+ YTD heading into Christmas week, the S&P 500’s average Christmas week rally was 1.08%, with gains 83% of the time. There have also been 25 years when the S&P 500 was down MTD heading into Christmas week, and in those years, the S&P 500’s performance was more muted at a gain of 72%, with gains just over two-thirds of the time. Together, there have been nine years when the S&P 500 was up 15%+ YTD and down MTD heading into Christmas week, and in those years, the average gain during the week was 0.92% with gains 78% of the time.

The chart below shows each of the nine other years that the S&P 500 was up 15%+ YTD and down MTD heading into Christmas week. The most recent occurrence was last year when the S&P 500 rallied 0.67% during Christmas week. Before that, the next most recent occurrence was way back in 1997.