Investors hold out for an end-of-year Santa Claus rally, weighing what a negative return heading into the new year means for 2025. LPL Financial chief technical strategist Adam Turnquist joins Madison Mills and Seana Smith on Morning Brief to discuss his market outlook for 2025. "We’re getting close to that end of the Santa Claus rally period," Turnquist says, explaining, "For those not familiar with that, it’s the last five trading days of the year, plus the first two trading days of the year. So, that wraps up on Friday after market close [and], of course, the level we’re watching on the S&P [500 is] 5,974." The strategist notes that a positive Santa Claus rally "tends to produce positive January returns and a positive year for the following year," while a negative Santa Claus rally brings "average annual returns over the following year only at 5%." Turnquist believes "pragmatic optimism" will "set the tone for 2025," outlining that he expects "a return to normal volatility" and "an average year for stocks." He adds that his market outlook for the new year is high single-digit returns from the S&P 500. He suggests the good news may already be priced in.
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