We also looked at the performance of each index when it was up 10% or more as of 12/18. Since 1928, there have been 38 years prior to 2009 where the S&P 500 was up by more than 10%, while the Nasdaq has had 21 occurrences since 1971. If history is any guide, years that are strong up until the last two weeks of the year typically finish that way. The S&P 500 has averaged a gain of 0.53% the week before Christmas with positive returns 63% of the time. In the week after Christmas, the index has averaged a gain of 1.2% with positive returns 84% of the time.
For the Nasdaq, the returns have been even stronger when the index is up more than 10% heading into the last two weeks of the year. In the week before Christmas during these years, the index averages a gain of 1.01% with positive returns 76.2% of the time. In the week after Christmas, the Nasdaq has averaged a gain of 1.82% with positive returns 100% of the time. That’s right. In the 21 years where the Nasdaq has been up 10% or more as of 12/18, the last
week of the year has been positive every single time.