Finance
European markets often soar in December, but what’s behind the rally?
There’s something about December that seems to charm equity markets into a year-end flourish.
For decades, investors have noted how the final month of the calendar tends to bring tidings of green screens and positive returns, fuelling what has become known as the Santa Claus rally.
But behind the festive metaphor lies a consistent, data-backed pattern.
Over the past four decades, the S&P 500 has gained in December about 74% of the time, with an average monthly return of 1.44% –– second only to November.
This seasonal cheer is echoed across European markets, with some indices showing even stronger performances.
Since its inception in 1987, the EURO STOXX 50, the region’s blue-chip benchmark, has posted an average December gain of 1.87%. That makes the Christmas period the second-best month of the year after November’s 1.95%.
More striking, however, is its winning frequency. December closes in positive territory 71% of the time — higher than any other month.
The best December for the index came in 1999, when it surged 13.68%, while the worst was in 2002, when it fell 10.2%.
Rally gathers steam in late December
Zooming in on country-level indices further reinforces the seasonal trend.
The DAX, Germany’s flagship index, has shown an average December return of 2.18% over the past 40 years, trailing only April’s 2.43%. It finishes the month higher 73% of the time, again tying with April for the best track record.
France’s CAC 40 follows a similar pattern, gaining on average 1.57% in December with a 70% win rate, also ranking it among the top three months.
Spain’s IBEX 35 and Italy’s FTSE MIB are more moderate but still show consistent strength, with December gains of 1.12% and 1.13% respectively.
But the magic of December doesn’t usually kick off at the start of the month. Instead, the real momentum tends to build in the second half.
According to data from Seasonax, the EURO STOXX 50 posts a 2.12% average return from 15 December through year-end, rising 76% of the time.
The DAX performs similarly, gaining 1.87% on average with a 73% win rate, while the CAC 40 shows even stronger second-half returns of 1.95%, ending positive in 79% of cases.
What’s behind the rally? It’s not just Christmas spirit
So what exactly drives this December seasonal phenomenon? Part of the answer lies in fund managers’ behaviour.
Christoph Geyer, an analyst at Seasonax, believes the rally is closely tied to the behaviour of institutional investors. As the year draws to a close, many fund managers make final portfolio adjustments to lock in performance figures that will be reported to clients and shareholders.
This so-called “price maintenance” often leads to increased buying, especially of stocks that have already done well or are poised to benefit from short-term momentum.
This behavioural pattern gains importance in years when indices such as the DAX trade within a sideways range — as has been the case since May this year. A sideways market is one where asset prices fluctuate within a tight range, lacking a clear trend.
According to Geyer, a breakout from this sideways range for the DAX appears increasingly likely as December kicks in.
From mid-November to early January, historical patterns suggest a favourable outcome, with a ratio of 34 positive years versus 12 negative for the German index — and average gains exceeding 6% in the positive years.
While past performance does not guarantee future returns, December’s track record across major global and European indices provides a compelling narrative for investors.
In short, December’s strength is not just about festive optimism. It’s a convergence of seasonal statistics, institutional dynamics, and technical positioning.
Disclaimer: This information does not constitute financial advice, always do your own research to ensure investments are right for your specific circumstances. We are a journalistic website and aim to provide the best guidance from experts. If you rely on the information on this page, then you do so entirely at your own risk.
Harley-Davidson’s new CEO wants to transform how people think about the iconic motorcycle brand, so the company is trying something different.
This week, Harley announced a new strategy that focuses on lower-priced bikes, rather than relying on older, more affluent customers to buy its higher-margin touring models.
“Back to the Bricks builds on our core strengths and competitive advantages, harnessing the passion of our riders to deliver profitable growth for the Company and both our dealers and shareholders,” Harley CEO Artie Starrs said this week. “As we drive towards this new phase of growth, we remain committed to the craftsmanship and dedication that define our brand.”
Entry-level Harley-Davidsons cost about $13,000, while the higher-end Adventure Touring models average about $23,250, and the Premium Range &CVO models cost about $38,500, according to Reuters.
Harley’s new strategy targets a core profit of over $350 million from its motorcycle business by 2027 and over $150 million in cost reductions.
To kick off the new strategy, Harley is introducing Sprint, a new entry-level model powered by a smaller 440cc engine, later in the year.
What is Harley-Davidson’s “Back to the Bricks” strategy?
Harley’s new strategy relies on more than just pushing buyers toward cheaper vehicles to increase volume. The 123-year-old company has a set of five pillars on which it is building its future.
Harley-Davidson “Back to the Bricks” 5-point plan
-
Deep appreciation of Harley-Davidson’s competitive advantages and legacy: The Company’s iconic brand, diversified and powerful revenue channels, and best-in-class dealer network provide a powerful foundation for growth.
-
Renewed commitment to exclusive dealer network to drive enterprise profitability: Harley-Davidson’s dealers are a competitive advantage. The Company is planning actions to enable dealers to double profitability in 2026 and then double it again by 2029.
-
Immediate actions to recapture share in areas where Harley-Davidson has right to win: Harley-Davidson has strong legacy equity in existing markets including new motorcycles, used motorcycles, Parts & Accessories, and Apparel & Licensing. The Company’s new strategy is focused on positioning the Company to regain share and drive meaningful volume growth in categories where it benefits from credibility, scale, and deep rider connection.
-
Strong financial position with a path to stronger free cash flow and EBITDA margin: Cost and restructuring actions already underway support a path to stronger free cash flow and EBITDA margin over time.
-
Bolstered management team with balance of fresh perspectives and institutional knowledge: Harley-Davidson has made a number of leadership appointments that support the Company as it leverages its innate strengths.
Written by Jitendra Parashar at The Motley Fool Canada
Dividend investing can be one of the simplest ways to build long-term wealth while creating a steady stream of passive income. But in my opinion, a good dividend stock is about much more than just a high yield. Beyond dividend yield, investors should also look for companies with durable businesses, reliable cash flows, and a history of rewarding shareholders consistently over time.
That’s exactly why many investors turn to financial stocks. Banks and asset managers often generate recurring earnings through lending, investing, and wealth management activities, allowing them to support stable dividend payments even during uncertain market conditions.
Two Canadian financial stocks that stand out right now are AGF Management (TSX:AGF.B) and Toronto-Dominion Bank (TSX:TD). Both companies offer attractive dividends backed by solid financial performance and long-term growth strategies. In this article, I’ll explain why these two financial stocks could be worth considering for income-focused investors right now.
AGF Management stock continues to reward shareholders
AGF Management is a Toronto-based asset manager with businesses across investments, private markets, and wealth management. Through these divisions, the company offers equity, fixed income, alternative, and multi-asset investment strategies to retail, institutional, and private wealth clients.
Following a 59% rally over the last 12 months, AGF stock currently trades at $16.67 per share with a market cap of roughly $1.1 billion. At current levels, the stock offers a quarterly dividend yield of 3.3%.
One reason behind AGF’s strong recent performance is its increasingly diversified business model. The company has expanded its investment capabilities and broadened its geographic reach, helping it perform well across varying market environments.
In the first quarter of its fiscal 2026 (ended in February), AGF posted free cash flow of $36 million, up 14% year over year (YoY), driven mainly by higher management, advisory, and administration fees. These fees climbed to $92.5 million as demand for the company’s investment offerings strengthened.
AGF has also been focusing on expanding its alternative investment business and introducing new investment products. With strong cash generation and growing demand for alternative investments, AGF Management looks well-positioned to continue rewarding investors over the long term.
TD Bank stock remains a dependable dividend giant
Toronto-Dominion Bank, or TD Bank, is one of North America’s largest banks, serving millions of customers through its Canadian banking, U.S. retail banking, wealth management and insurance, and wholesale banking operations.
-
Sports4 minutes agoWings rookie Azzi Fudd sets dubious WNBA record with lowest-scoring debut by top pick
-
Technology10 minutes agoFive data broker opt-out myths that leave retirees exposed
-
Business16 minutes agoMattel investor campaigns to take the company private
-
Entertainment22 minutes agoFCC drops trove of viewer complaints over Bad Bunny’s ‘disgusting’ Super Bowl halftime show
-
Lifestyle28 minutes agoHow to have the best Sunday in L.A., according to Pete Yorn
-
Politics34 minutes agoCalifornia abortion pill suppliers ready with workaround in case of Supreme Court ban
-
Sports46 minutes agoLakers drop Game 3 to Thunder; now one loss from elimination
-
World58 minutes agoIran warns US against attacks on tankers; Israel kills dozens in Lebanon