Best Seasonal Stocks for December: The Santa Claus Rally, Tested

December is supposed to be one of the best months for stocks, capped by the famous “Santa Claus rally”. We tested that reputation against 15 years of price history with the SeasonalityX engine. The short version: December as a whole is ordinary, its strength sits in the second half of the month and the turn of the year, the classic Santa window has been close to a coin flip recently, and a number of individual stocks have had far more reliable December setups than the index.

Is December actually a strong month?

Not on its own. Measured as a full calendar month, December ranks in the bottom half of the year for the major US index ETFs over the last 15 years:

December usually closes higher, but not by much, and one bad year weighs heavily: SPY lost 8.8% in December 2018. The month’s reputation comes from a specific part of it.

First half vs second half

Split December in two and the picture changes. For the S&P 500 (SPY):

The first half of December has been flat to negative on average. The gains have come from mid-December onwards and carried into the first days of January.

The Santa Claus rally, tested

The Santa Claus rally traditionally covers the last five trading days of December and the first two of January, roughly December 24 to January 3. Over the last 15 seasons, SPY rose in that window only 8 times out of 15, with an average gain of +0.50%. It also fell in each of the last four seasons, from the window ending in January 2023 through the one ending in January 2026.

Widen the window by a few days, to December 21 – January 4, and the record improves to 11 of 15 years with an average of +1.03%. The year-end strength is real for the index, but it has been looser and more spread out than the textbook definition suggests.

10 stocks with strong December setups

Individual stocks have been far more consistent than the index. We scanned the S&P 100 and the major ETFs for bullish windows that start in December, with at least 13 years of data, an average return of 2% or more and a win rate of 75% or more. 68 of 115 qualified. These are ten of the most consistent:

Full histories, every individual year and the live status of each window: MDT, JPM, CSCO, GE, C, BAC, MU, AMD, TMO, V.

What the numbers suggest

• The turn of the year matters more than December itself. Almost every strong window starts in mid-to-late December and runs into January.
• Big banks repeat. JPMorgan, Citigroup, Bank of America, Morgan Stanley and BNY all have mid-December to early-January windows that rose in 13 or 14 of the last 15 years.
• Chipmakers are strong but bumpy. Micron, AMD, Lam Research and the SMH semiconductor ETF rose in 13 of 15 years, but their worst years fell 7% to 12%.
• Watch the outliers. Netflix’s Dec 29 – Jan 28 window has the highest average (+20.4%), but its worst year lost 37%. A big average built on a few huge years is not the same as consistency.

Past seasonal performance does not guarantee future results. Win rates and average returns are historical base rates, not predictions. This is for informational purposes only and is not financial advice.