Ho Ho Ho! Retailers and consumers begin planning for the Christmas holidays as soon as Halloween ends. We can see the early rush during the Thanksgiving weekend when good deals for Black Friday and Cyber Monday can be found. If the sales during this weekend are in line or exceed expectations, we can generally expect the stock market to be fruitful during the upcoming weeks.
This is called the Santa Claus Rally, meaning holiday optimism leads to good stock performance in December and can last until the first few days of January. Here’s how you should invest in Christmas to receive the best gifts from your family and friends and the stock market.
Table of Contents
What Is the Santa Claus Rally
The Santa Claus Rally is a market phenomenon tracked for decades. Generally, the stock market performs well during this period due to holiday optimism. Of course, this isn’t a certainty.
Many outside factors, such as a pandemic, a war, an environmental disaster, or geopolitical uncertainties, can lead to a grim Christmas. During this period, some stocks and sectors have historically outperformed others. If you want to invest in Christmas stocks, here are some you should consider.
In 1931, Coca-Cola started a marketing campaign featuring a jolly Santa Claus on their Coke bottles. This campaign became very popular and helped establish the modern and joyous image of Santa Claus that is now ingrained in popular culture.
While some companies follow Coca-Cola’s Christmas steps, others rely on consumers to visit their platforms and drive their sales up during the holiday season. Add them to your invest in Christmas list.
Retail and E-commerce
This year, retail and e-commerce are the pillar sectors during Christmas. Millions of consumers flock to physical and online stores to purchase gifts for themselves and their loved ones.
While some prefer to shop locally, an increasing number prefer sticking to multinationals for their holiday needs. And that helps to invest in Christmas.
Invest in Christmas Stocks
1. Walmart (NYSE: WMT)
Walmart is a major retail player, and often experiences increased sales during the holiday season. Many choose Walmart, both online and in person, for their Christmas decorations, gifts, toys, electronics, or the newest gadgets.
According to a study, around 25% of Americans choose Walmart for their shopping. The company has over 10,000 stores in 19 countries, making it a major player to invest in Christmas.
2. Costco (NASDAQ: COST)
How many Americans stock their fridges for the holidays in Costco? The company also offers great seasonal Christmas deals for electronics and various gadgets.
On top of its 861 locations in 15 countries, Costco is slowly establishing an e-commerce platform where you can conduct all your shopping—making it a great way to invest in Christmas.
3. Home Depot (NYSE: HD)
Home Depot plays a significant role during Christmas shopping, primarily in holiday decorations, home improvement projects, and seasonal goods. The company is the largest home-improvement retailer, running 2300 stores across the US, Canada, and Mexico.
Thanks to its seasonal promotions and in-store workshops, Home Depot is the perfect store for all your DIY and home improvement needs during Christmas. Buy $HD to invest in Christmas.
4. Amazon (NASDAQ: AMZN)
You can invest in Christmas with Amazon. After a record Black Friday, Amazon wants to keep momentum until Christmas. Despite some of its employees being on a global strike, the company sold more than 1 billion items during the extended Black Friday and Cyber Monday period.
Half of those items came from independent sellers. Amazon promises similar deals and lightning-fast deliveries until December 24th, which is enough to make its shoppers and shareholders happy.
5. Alibaba (NYSE: BABA)
One of Amazon’s biggest competitors outside of the US is Alibaba. It may not have the best stock market performance lately and is operating in a not-so-hot market in Asia, but there is some hope left for the company.
In China, Black Friday and Cyber Monday are replaced by Single’s Day (November 11th), which wasn’t a big success this year. Asian consumers are looking for cheaper products instead of the latest expensive gadgets.
An increasing number of brands are promoting their products on Alibaba, but those efforts won’t be rewarded until an economic recovery is underway in China. It could be a discount invest in Christmas idea.
6. Shopify (NYSE: SHOP)
So far, Shopify is experiencing a holiday season similar to Amazon’s, with a record $9.3B in sales over the Black Friday and Cyber Monday weekend. Thanks to its 61M global consumers during this period, this is a 24% increase from last year.
Over 17,000 new entrepreneurs made their first sale, and 55,000 had their highest-selling day. Shopify will also hope to keep the good news coming until Christmas.
7. MercadoLibre (NASDAQ: MELI)
MercadoLibre is lesser known than other e-commerce giants because it operates in Latin America, namely Brazil, Chile, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Peru, and Uruguay.
Thanks to an amazing Black Friday performance, the stock was up 24% in November and keeps rising. There was considerable growth across the board, especially in consumer electronics, which grew by 140%.
Mercadolibre is one of the strongest performers YTD and will look to build on this momentum going into Christmas. The South might not have much snow and cold, but they love to spend. So invest in Christmas with $MELI.
COMPANY |  |  |  |
|---|---|---|---|
| DESCRIPTION | Trade Ideas provides powerful tools like real-time market scanning, AI-driven trade signals, customizable alerts, advanced charting capabilities, and time-saving data visualization | Barchart.com is the leading provider of real-time or delayed intraday stock and commodities charts and quotes. Track and analyze your investments and keep tabs on your portfolio | FinViz is an online stock screening, research, and visualization platform that offers various trading tools on a single platform. Solid scanner for traders or investors |
| HIGHLIGHTS | Trade smarter • Trade faster • Ease of use • Artificial intelligence • Real-time scanning • Customizable Trade Ideas > | Real-time quotes • Equities scanner • Ease of use • Track your investments • Analyze portfolio Barchart > | Stock screener • Powerful research tool • Heat map • Ease of use • Financial visualizations Finviz > |
When Is the Stock Market Open and Closed During Christmas?
Christmas is on a Monday this year, but can you trade on the stock market? Here’s all you need to know about trading days and hours during the Christmas holidays.
- Friday, December 22nd – regular hours
- Saturday 23rd, Sunday 24th and Monday 25th – closed
- Tuesday 26th – regular hours in the US, but closed in Canada
- Friday 29th – regular hours
- Saturday 30th, Sunday 31st and Monday, January 1st – closed
- Tuesday, January 2nd – regular hours in the US and Canada
Consumer Goods
Black Friday isn’t what it used to be for brick-and-mortar stores. Consumers prefer to conduct their shopping online as much as possible. What does that mean if you want to invest in Christmas?
As for Christmas, consumer goods used to be a big part of holiday shopping, but consumers are looking for the best deals this year. Fewer people than ever camp outside stores to snag the best items. Instead, they head online.
What can you expect this year for the consumer goods sector during Christmas? I don’t think it’s the sector to look at anymore. Sales aren’t expected to grow by much, if at all, due to smaller budgets. Investors will be looking elsewhere for better results.
Technology
One sector many consumers and investors might turn to is tech. Everybody loves to receive the newest gadget or the hottest gaming console. Some of the biggest names in tech, such as Google, Apple, or Microsoft, are an obvious choice to invest in Christmas. However, let’s take a look at another.
Sony’s stock had a decent run this year. Its products (Playstation, video games, cameras, headphones, and other electronics) make it an easy pick during Christmas. The stock might experience a surge if sales meet and exceed expectations.
Final Thoughts: Invest in Christmas
To conclude, the last weeks of November until the end of December tend to be prosperous for investors as some stock market sectors outperform others. Certain retail, e-commerce, and tech stocks are poised for success this year.
However, stock market gains aren’t limited to these sectors and industries. The stock market performs differently year after year, and some stocks perform better than others. Before investing, understand all the factors influencing the stock market.
If you want to learn more about profiting from the stock market, head to our free library of educational courses. We have something for everyone, including trading options for those with small accounts.
Frequently Asked Questions
Stocks like Microsoft, Apple, and Amazon tend to go up during Christmas time. There are an uptick in sales as presents are bought.
Christmas is usually a good time to buy stocks because of the Santa Claus rally. If you're day trading, you can make a nice profit off moves up and down.
The short answer is yes. The increase in retail sales affects the market as well. And stocks go up.
