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A December To Remember

December 04, 2019

Of course, that phrase has become familiar because of a car ad on TV, but its applicability to the stock market in December of 2018 was undeniable. Most of us remember December of last year pretty vividly, as the equity markets sold off sharply and made a distinct low on Christmas Eve of all days. The S&P 500 Index was down 9.2% for the month. Ouch. But is that typical? In fact, no. Over the past 50 years, the month of December has been the best performing month of all. I came across some further granularity about December stock market performance thanks to our friends at Bespoke Investment Group.

 

S and P 500 December Intra Chart

 

As you can see above, equity performance in the first part of the month is generally tepid, but as Christmas cheer revs up, so does the market. This year, as an added factor, we are faced with the possibility of further tariffs on Chinese goods coming into effect on Dec 15th. Could President Trump hold off on implementing those tariffs as a sort of Christmas present to the market? And could that be the catalyst that allows the December rhyme to continue? After all, he’s nothing if not calculating.

But let’s wait on that one and just file it all under “food for thought”.

Gordon Reid

President & CEO

Gordon Reid, President and CEO of Goodreid Investment Counsel Corp., entered the financial services business in 1985 and co-founded Goodreid Investment Strategy, one of Canada's first fully discretionary "high net worth" wrap accounts.

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