What is the Santa Claus Rally? The Santa Claus rally is a seasonal stock market trend that identifies the last five trading days of December and the first two trading days of the new year, when prices tend to rise. Over the last 50 years, the S&P 500 has gained an average 1.3% during this period and has been reliable about 80% of the time. The gains are driven by investing bonus dollars, lighter institutional trading, tax-loss harvesting in addition to holiday optimism for the new year.
The Dow Jones Industrial Average, a gauge of the 30 largest companies in the USA, is at its highest point in history, closing this past weekend at 48,101. The Dow began 2025 at 42,392. The gain of almost 15% for the year was driven by a looser monetary policy and declining interest rates, along with deregulation under the Trump Administration. The Artificial Intelligence boom is reshaping companies and their earnings projections. The market has absorbed the seismic shift in global trade and tariffs pushed by Trump without Congressional approval.
I’m not an economist, and this is an opinion piece. The content to follow is for informational and educational purposes and not a substitute for personalized professional advice. Any investment actions that you decide to make are your personal responsibility.
The global macroeconomic view is being reshaped by Trump policies: aggressive use of tariffs, disrupting supply chains, and the undermining of institutions such as the Federal Reserve. The consequences of Trump’s actions are not yet known. Trump’s policies, which support the advancement of cryptocurrencies and the global digital dollar, will lead to a weaker U.S. dollar and threaten demand for U.S. Treasury bills, and the bottom will fall out in years to come.
But the short-term road is filled with opportunities. Trump’s One Big Beautiful Bill is filled with goodies that will juice consumption. No taxes on tips up to 25k. No taxes on overtime up to 12.k. No taxes on Social Security. Restored limited SALT deductions for homeowners. The advancement of artificial intelligence will streamline larger businesses and wipe out smaller ones. There was a movie back in the 1970s called “Network.” The film depicted the largest businesses in the world running the planet. Around the table, the decision-makers were the CEOs of those companies. I’m sure Donald Trump saw this movie.
The film’s ultimate warning is about unchecked corporate control and the dangers of prioritizing profit and ratings. It’s a struggle Bernie Sanders or Elizabeth Warren talk about daily. They saw the movie, too.
The Dow Jones Industrial Average will always go up. The S&P 500 index will always go up over time. The philosophy behind these indexes is that they track the largest, currently trending companies. Every quarter, four times a year, weaker companies may be dropped, and stronger companies on the rise may be added. There is a perpetual wind at the backs of these indexes, and, in my opinion, a concentration of wealth that continues to rise and leaves others behind. The market seems to hit new highs when real-life struggles on the ground are at their peak.
The digital dollar, a global currency, cryptocurrency, and stablecoins that are pegged to paper money is a wave that will be a tsunami. The USA is not going to fare well in this scenario. Lack of demand for U.S. Treasury bills can lead to a Great Depression once again. Perhaps these are the Roaring ’20s. In the last century, the Roaring ’20s were followed by the Great Depression. If you’re an investor, learn about reverse ETF funds and how to play the market down. The SQQQ, which is a reverse-leveraged ETF (exchange-traded fund, or a basket of stocks in one fund), is tied to Nasdaq declines. When you smell a crash, you buy the SQQQ.
The market is imperfect. The idea is to notice these inequities and buy before the rest of the market catches up. The options market is fascinating, where you can grow a fortune overnight. In this column, written on Aug. 31, I presented the two Davids, David Zaslav, CEO of Warner Bros., and David Ellison, CEO of Paramount/Skydance. Ten days later, they announced a merger. You can read that column here.
Now, let’s get into what is happening now. How to make a good investment going forward. What to do with some extra cash. (It’s not appreciating when tied to inflation in the bank.)
First of all, again, I’m not a financial consultant. But I do love the market and spend lots of my time researching companies and trends. Through the lens of business, you can see the world.
Personally, I like to invest in things that are familiar. It’s important to be in the right sector. Financials, Health Care, Defense, Data Security, and when the tide turns, Consumer Discretionary, Basic Materials. You can invest in any of these managed ETFs (exchange-traded funds) and let the pros do the picking. It’s better to be in the right sector, where a rising tide lifts most boats. A good stock in a bad sector is like pin-the-tail-on-the-donkey. Move with the market flow and evolving trends.
I like to follow companies with insider buying, a new CEO who has kitchen-sinked the previous quarter, momentum trading, and cyclical demand trends. Again, do your own research and don’t be afraid to take a profit. Shout-out to Josh Brown, David Tepper, Bruce Berkowitz, David Einhorn, and Jim Cramer as some of the people to watch and listen to.
I’d love to write about more sectors and their top stocks, but for today I’m going to focus on the financials because it is a good time for this sector, and most of you are familiar with these companies. But there are so, so many interesting companies to review which offer even greater opportunity than the below listed stocks. So, I’m playing it safe here with you. These are surefire winners.
Capital One Financial (COF) – Price 12/20/24: closed at $178. Price 12/20/25: closed at $243. In the fall of 2024, Capital One completed its acquisition of the Discover Network, creating a closed-loop system where the card issuer is also the processor. Capital One now rivals the larger networks of Visa, Mastercard, and American Express. Capital One will now control the entire payment process and keep a higher share of the interchange fees. Capital One gained Discover’s international network of over 70 million new merchants in more than 200 countries and the Diners Club brand. In 2024, Capital One was granted 424 patents in Artificial Intelligence and is dominant in the financial services industry. With a market cap of 156 billion, compared to the market cap of Visa 675 billion, Mastercard 518 billion and American Express 412 billion there is a long runway ahead for this company. Back up the truck on Capital One.
Citigroup (C) – Price 12/20/24: $69.20. Price 12/20/25: closed at $115. Since assuming her role in 2021 as the first and highest-ranking female in the banking industry, Jane Fraser has transformed Citigroup. Fraser has overhauled Citigroup, divesting non-core businesses, streamlining operations, and focusing on Citi’s core strengths of institutional banking and wealth management. Citigroup is the premier global bank with room to run. Mike Mayo, respected bank analyst for Wells Fargo, touts Citigroup as his No. 1, No. 2, and No. 3 top picks for 2026.
Wells Fargo (WFC) – Price 12/20/24: $70.36. Price 12/20/25: closed at $93.01. Sometimes you bet on the horse, and sometimes you bet on the jockey. Charlie Scharf is the CEO of Wells Fargo, who has navigated the company from the treacherous waters of the past ten years. In June 2025, the Fed lifted its asset cap and removed the consent decree imposed in 2018 that froze the company’s assets at $1.95 trillion due to the scandal involving fake accounts. With its growth hands tied, Wells has bought back over $30 billion of its own shares and has authorized an additional $40 billion of share buybacks. The company sells at about 1.3x book versus JPMorgan Chase at 2.5x book. With a new expense discipline, and the asset cap lifted there is growth ahead. Lots of good here.
Fiserv (FISV). Price today: $67.94. Down from $238 per share as its 52-week high. New CEO Mike Lyons kitchen-sinked the quarter and projections. Think Donald Trump blaming Joe Biden and discounting the numbers. Mike Lyons took over in May, and when he kitchen-sunk the quarter, the stock lost 75% of its value. Fiserv is involved in every aspect of your life. The company is behind the Clover retail checkout system, it’s a market leader in public sector processing, and powers small businesses across the globe. Off its crash bottom at $59, with a price-to-earnings ratio for 2026 below 10, insider buying in the last two weeks by the company’s CFO Paul Todd, Chief Legal Officer Adam Rosman, and Director Lance Fritz. I love this company so much we recently converted the checkout system at BlockParty to Clover.
Best roll of the dice: LexinFinancial (LX). This is a Chinese fintech company that is severely depressed. For the life of me, I do not understand this market inequity, often asking myself or posting on message boards what is going on here> The shares are currently selling for $3.30, down over 70% from its 52-week high of 11.65. The company is growing each year and pays a dividend over 9%. The company has announced a share repurchase program, and the CEO is buying with his personal money. The company’s price-to-earnings ratio is below 3. In November, the company reported strong revenue and earnings growth. As of last month, JPMorgan Chase owned over 2 million shares of this company. Other investors include Bank of America and the Vanguard Group. Accumulate.
Through the eyes of business, you really can see the world. Through the eyes of business you can see the future. There are many forces driving the market today. Oracle moves to build data centers and spooks their investors when they take on debt to support their customers’ growth. The need to add tremendous capacity to the electrical grid. The Trump effect, in my opinion will compromise short term gain for the long term interests of America. The US dollar will decline over time and its good to hedge your bets.
My advice: Don’t put all your eggs in one basket, and know why you’re buying a stock. If that thesis changes, take your loss. If the thesis is right and the market has yet to recognize the opportunity, continue to build your position before the rest of market catches up.
Disclosure: The author has a financial interest in the securities listed in this article.
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My advice: Don’t take any financial advice from someone who regurgitates the Republican talking point that the SALT deductions were “restored.” The were temporarily raised to $40K (there used to be no limit) with significant phase outs based on income (there were no phase outs before). Just like the “no tax on overtime” nonsense, the devil is in the details.
I’m a novice at this but Reagan dramatically improved the economy and set it on the course we have benefitted from ever since, despite his very vocal critics at the time. How is what Trump is doing different from what Reagan did?
Opposite. Reagan pushed free global trade and breaking down barriers and Trump puts up barriers and discounts global free trade.
Yes, whatever is left of the Reagan economy, free trade, is gone now with these damn tariffs.
A friend who is a bit more knowledgable at these things than I says that the trade imbalance that Trump is correcting with tariffs started after Reagan. Among other benefits of the tariffs, he says, is that manufacturing is coming back to the US.