These Stocks Could Be Part of This Year's Santa Claus Rally

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Dec. 16 2021, Published 2:01 p.m. ET

The stock market loves its nicknames. September sell-offs, quadruple witching hours, and—of course—the Santa Claus rally.

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What's the Santa Claus rally and what stocks are poised to be part of this year's pump as 2021 comes to a close?

What is a Santa Claus rally?

A Santa Claus rally is a period of time at the end of the calendar year when stocks usually increase or go on a bull run.

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Historically, the annual Santa Claus rally occurs most densely during the last five trading days of December and first two trading days of January. However, the last week or so of December often follows an upward trend.

The Santa Claus rally isn't a sure thing, and some years are better than others. Still, the presence of a Santa Claus rally can, to an extent, foreshadow a more prosperous year for stocks.

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Jim Cramer says that Santa is coming early this year.

CNBC's Mad Money host Jim Cramer said on Dec. 15 that this year's Santa Claus rally could come a few days ahead of schedule. Now that the Federal Reserve has gotten through its last policy decision of the year without mayhem, Cramer said that he doesn't foresee anything getting the stock market off of its course through the end of the year.

With the Dow Jones, Nasdaq Composite, and the S&P 500 all up, Cramer said, "There’s nothing on the calendar that could derail the market between now and the end of the year." Even with about two weeks left in the year, Cramer said that the rally could still start now.

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What stocks could be a part of the Santa Claus rally?

Big stock market movers on Dec. 16 like Irish IT company Accenture Plc (NYSE:ACN), Pfizer Inc. (NYSE:PFE), Marathon Oil Corp. (NYSE:MRO), and AT&T Inc. (NYSE:T) could potentially be a part of the Santa Claus rally.

Others, like online advertising company PubMatic (NASDAQ:PUBM) and cannabis brand Planet 13 Holdings (OTC:PLNHF) are in a good position for the potential end-of-year bull run.

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Blue chip stocks like Apple Inc. (NASDAQ:AAPL), Goldman Sachs Group (NYSE:GS), Home Depot Inc. (NYSE:HD), and Microsoft (NASDAQ:MSFT) are also potential bets in late December 2021. However, some investors are saying to beware of tech stocks.

Jim Cramer gave his take on Fed disruptions and the Santa Claus rally.

According to Cramer, the Fed's prior announcements about inflation and tapering of bond purchasing have already hit the market, which is why we're able to rebound quicker from market pressure (like announcements of interest rate increases) at this point in the game.

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Cramer said, "Because [Fed Chair Jerome] Powell had already signaled that something like this was coming, the stock market had already baked in the damage and applied it to every sector, which is what else allowed us to rebound today."

Does this mean that these stocks are a sure thing? No. Not even the Santa Claus rally itself is a sure thing. Still, it's a good starting point and shows you what industries are seeing heightened trading volume as the year comes to a close.

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