EB Monthly Seasonality Report - December 2024
A Look Back At November Stocks:
Last month, we released our list of the Top 20 stocks that had strong historical track records during the month of November. Here are how they performed in November 2024, in order of best to worst performer:
- TSLA: +38.15%
- BBWI: +27.70%
- MRVL: +15.70%
- DE: +15.13%
- DXC: +13.29%
- PH: +10.86%
- ROK: +10.66%
- ALK: +9.79%
- MSCI: +6.73%
- MNST: +4.65%
- NVDA: +4.14%
- HOLX: -1.69%
- NXPI: -2.19%
- MTD: -3.14%
- CNC: -3.63%
- AMD: -4.78%
- ABBV: -10.27%
- MKTX: -10.62%
- ENPH: -14.08%
- MRNA: -20.79%
The percentages represent the returns from the October 31st close to the November 30th close. The average performance of all 20 stocks (+4.28%) slightly underperformed both the S&P 500 (+5.96%) and the NASDAQ 100 (+5.35%). Our biggest November winner was Tesla (TSLA), an automobile stock ($DJUSAU), which soared during November on extremely heavy volume. On the flip side, Moderna (MRNA) was our worst November performer and was under intense selling pressure throughout much of the month. Fortunately, MRNA did rally a bit over the second half of November, helping us avoid a total wipeout.
S&P 500 December Performance
Here's a breakdown of the annualized performance of the S&P 500 (since 1950) during the month of December, a mostly bullish month historically. While December's annualized performance trails both November and April, it does boast the highest rate of positive returns among all months. The S&P 500 has risen during 55 Decembers, falling just 19 Decembers since 1950. Here's a breakdown of strong and weak performance periods throughout December:
- December 1-8: +19.28%
- December 9-15: -16.92%
- December 16-18: +53.55%
- December 19-20: -20.73%
- December 21-31: +40.50%
December's annualized return since 1950 is +17.64%, which ranks as the S&P 500's 3rd best calendar month, trailing only November (+21.40%) and April (+17.84%).
Sector Performance
The third calendar month (March, June, September, December) of each calendar quarter tend to perform differently than the other 8 calendar months of the year. It's quite normal to see money rotate into more defensive areas as earnings season comes to a halt. During earnings season, it's not unusual to see significant rotation into aggressive areas, and so once earnings season slows, it makes perfect sense to see profit taking in those aggressive areas. Hence, the relative strength in defensive stocks. Real estate (XLRE) and utilities (XLU) have a history of performing well in December. Consumer staples (XLP) and healthcare (XLV) rank 3rd and 4th in terms of December performance, so there's clearly a lot of interest in defensive names during December. Keep this in mind, especially during times of the month where the S&P 500 struggles - we could see significant rotation into more dividend-paying stocks.
I think the XLRE could definitely bounce off its 50-day SMA test after printing what appears to be a sloppy "cup with handle" bullish continuation pattern:
I'd like to see the XLRE:$SPX relative support level hold. If it does, we should begin to see real estate showing up more often at the top of the sector leaderboard in the next few days to few weeks.
Industry Performance
Last month, I thought that railroads ($DJUSRR) could start to make a run from the 3300 support level, which it did. In fact, the DJUSRR rallied 10% in 2 days in early November, but there was plenty of whipsaw action back and forth, as you can see below:
The good news is that we certainly saw the group enjoy excellent absolute and relative strength during November. The bad news, however, is that the DJUSRR ended November at a new relative low. In other words, we really haven't seen a whole lot of improvement for the long-term.
Here are all industry groups that tend to perform much better than the benchmark S&P 500 during December:
Technology (XLK):
- telecom equipment, electronic equipment
Consumer Discretionary (XLY):
- recreational services, furnishings, home construction, hotels, home improvement retailers, toys, apparel retailers
Communication Services (XLC):
- none
Industrials (XLI):
- none
Financials (XLF):
- consumer finance, investment services
Health care (XLV):
- medical equipment
Consumer staples (XLP):
- personal products, nondurable household products, food products
Real estate (XLRE):
- real estate holding & development, real estate services, industrial & office REITs
Utilities (XLU):
- water, conventional electricity
Energy (XLE):
- coal
Materials (XLB):
- aluminum, nonferrous metals, gold mining, mining
Stocks for December
We've selected our Top 20 seasonal stocks for December. Several names represent sectors and industry groups that have been discussed above. Others simply stand out in December based on their own historical track record.
The stocks this month, with average December performance, are as follows:
- BLDR: +8.1%
- WDC: +7.9%
- AVGO: +7.4%
- ON: +7.4%
- LW: +7.1%
- STX: +6.1%
- LEN: +5.9%
- ARE: +5.6%
- SMCI: +5.5%
- VTR: +5.4%
- ILMN: +5.4%
- MHK: +5.2%
- MGM: +5.1%
- RCL: +4.9%
- IVZ: +4.8%
- LLY: +4.8%
- NVR: +4.7%
- EXR: +4.7%
- LYV: +4.7%
- TMUS: +4.6%
A "Seasonality - December 2024" ChartList (annotated with 1 or 2 support levels to watch) has been created and is available for viewing/download. You must be a StockCharts.com Extra or Pro member to download our ChartLists. Basic members and non-StockCharts.com members can view the charts one at a time.
Happy trading!
Tom