Does the "Santa Claus Rally" really exist? Some market pundits have noted that the seven-day period from Christmas through Jan. 3 has unusually high returns in the stock market. Srinivas Nippani of Texas A&M University-Commerce, Ken Washer from Creighton University and I studied the Santa Claus rally around the globe.
What we found is that the Santa Claus rally is indeed present in both Christian-based countries and non-Christian based countries around the globe. Specifically, returns are higher for that seven-day period than the average of other seven-day periods during the year. This is not a U.S.-based phenomenon; the consistency across the globe is startling. The returns over the Santa Claus rally period are greater than returns in the non-Santa Claus rally period for all 16 countries that we studied: U.S., Canada, Mexico, Brazil, UK, Germany, France, Australia/NZ, Japan, Hong Kong, China, Singapore, India, Indonesia, Taiwan and South Korea.