Wednesday concludes the first five trading days of 2025, which serve as an “early warning system” for the year’s market trends, according to the Stock Trader’s Almanac. This period, alongside the Santa Claus Rally and the January Barometer, provides key signals for investors. Historically, during the last 48 years, positive performance in the first five days correlated with an average yearly gain of 14.2%, with the market finishing higher 40 times. Conversely, in the 26 years of negative performance, the average increase was only 0.3%, with just 12 positive annual outcomes. Notably, the trend appears stronger in post-presidential election years, where the market rose 14 out of the last 18 times. Jeff Hirsch, the Almanac’s editor, emphasizes that while the First Five Days is only part of the overall picture, it has a solid track record in these specific years. Despite a lackluster Santa Claus Rally and December’s decline, investor sentiment remains optimistic for 2025, with strategists projecting the S&P 500 to conclude the year at 6,643—12% higher than its recent close. The upcoming January Barometer will be crucial for shaping investor expectations, especially as they seek clarity on economic indicators and policy shifts.
