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Whats on the horizon for December after a record November

The first day of December saw gains across the major stock market averages (^DJI, ^IXIC, ^GSPC) after a record-setting November. Can it continue into the new year? Yahoo Finance Reporter Jared Blikre joins the Live show to put the numbers into perspective and give insight on what's to come.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript


JOSH LIPTON: Markets kick off the first trading day for the month of December with gains. Here for what might be in store for major averages in the last stretch of the year, we have Yahoo Finance's Jared Blikre. Jared.

JARED BLIKRE: Thank you, Josh. Well, read the headline here, stocks tend to rally in December. And really, it's in the back half of the month. That's when trading really slows down and people just kind of settle into the holidays. Until then, might get a few bumps. And by the way, this is only what happens on average going all the way back to 1950. But of course, our results can vary here. And let's just keep in mind that we had a tremendous November, so more on that in a second.

But I just want to show what on average and what on median happens with the sector returns for the large-cap sphere in the month of December. The number one median is communication services. A little footnote there, it's only been in existence for a few years, but it does have Alphabet and also Meta. It also has Verizon, Netflix, a bunch of different disparate tickers. But that is for what it's worth, number one, at least in terms of the median return, over 2%.

Then you have consumer discretionary. I think not surprising because that is a retail-oriented sector. People are thinking about the holidays. And the retailers are all too eager to release the results, I guess, if they're good. Then we have financials health care and energy. Now health care and energy arguably a little bit defensive. Financials interesting that they would be doing well.

But if we take a look at the second page, that's when the results tend to drop off. Utilities, consumer staples, that's also retail. But materials and industrials, all of those averages and medians are positive. But then we start getting into negative territory for tech. Tech has an average, I guess, over the years averaging down about 1%. And real estate, about half of that. I would note that the median returns are positive. But if we think about all the outsized returns we've had this year and especially concentrated in tech, this is what's happened only in the last month in my leader sphere.

Look at Arc, up 36%. Meme stocks up 26%. Are we going to get a repeat of that going forward? Probably not. Arguably, a lot of the demand for the Santa Claus rally has been pulled forward and maybe it's exhausted itself. But I want to leave you with this. This is the bulls and are surging as the bears retreat. This is AAII bull-bear survey results. And the bulls are at the upper limit, the bears are at the lower limit. We have not seen a spread this wide in forever. So another sentiment indicator, maybe things got just a little bit too bullish in the month of November.

JULIE HYMAN: So we'll see how if it swings back in December. Thanks so much, Jared. Appreciate it.