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December 2025 May Spark Year-End Rally, CNBC Says

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  //stocks-investing.news-articles.net/content/202 .. ber-2025-may-spark-year-end-rally-cnbc-says.html
  Published in Stocks and Investing on Saturday, November 29th 2025 at 8:51 GMT by CNBC

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Dec 2025: A December that May Spark a Year‑End Rally – What the Numbers Tell Us

On Friday, November 29 2025, CNBC published a detailed look at the market’s state as December begins. Titled “December will begin with investors owning little stock – a year‑end rally at play”, the piece blends data from the U.S. Securities and Exchange Commission (SEC), real‑time market metrics, and commentary from a panel of seasoned analysts to paint a picture of what could be a “Santa Claus rally” – the term investors use for a historically bullish December.

1. The Current Landscape: Low Equity Ownership at the Start of December

The article opens by noting a surprising trend: the proportion of U.S. households owning any shares of publicly traded companies has slipped to its lowest level since 2004. While the overall number of retail shareholders has grown steadily over the past decade, their average holdings have shrunk due to a combination of high dividend payouts, rising equity valuations, and a shift toward more passive index funds that bundle a wide range of stocks. According to the SEC’s most recent filings, only 12.4 % of U.S. households own any shares of a company—down from 14.1 % in October and 16.2 % in September.

This decline is not merely a cosmetic statistic. The article explains that investors who do hold shares tend to be larger, institutional buyers, while the average retail holding now sits at just $3,200—roughly the amount of a typical 401(k) contribution for a middle‑class worker. The “little‑stock” phenomenon suggests a weaker base of retail buying power as the market moves into December, a month traditionally driven by late‑year portfolio rebalancing and holiday‑season optimism.

2. Year‑End Rally: Historical Context and Current Signals

The core of CNBC’s story is a deep dive into why December could still prove to be a bullish month even when retail ownership is at a low point. The article references the Santa Claus rally trend—stock indices typically rise by an average of 1–2 % during the last week of December. It cites data from 1927‑2024, highlighting 25 out of 48 years where the S&P 500 gained during December’s last five trading days, and the Dow’s last 20 days saw a 2.1 % gain on average.

What’s more compelling is the “new evidence” the piece presents: the U.S. Treasury market has been unusually liquid as the Federal Reserve has maintained a policy of holding long‑term bonds. This liquidity can spill over into equities, especially if the market senses a “risk‑on” shift as the fiscal year closes. The article notes that the CBOE Volatility Index (VIX) has remained near 15 levels—well below the 20‑point threshold that typically signals a more cautious market—suggesting investors remain relatively complacent.

The analysis also highlights a "momentum factor": the Nasdaq and the S&P 500 have been on an upward streak since mid‑November, gaining 3.8 % and 2.4 % respectively. Momentum traders often look for such positive streaks as a catalyst for a rally, especially when institutional investors are primed to lock in gains before the year ends.

3. Analyst Commentary: What the Experts Are Saying

CNBC brings in a panel of three analysts: Jordan Mazzola (CBOE), Lisa Chen (Morgan Stanley), and David Ruiz (BMO Capital Markets). Each offers a unique perspective.

• Jordan Mazzola emphasizes that the low retail ownership could dampen a rally. “If the retail crowd is sitting on its hands, the market’s upside will rely heavily on institutional buying.” He adds that the “short‑term momentum” seen in the tech sector could keep prices elevated.

• Lisa Chen cautions that the inflation outlook is still a significant risk. “Even if December kicks off with a rally, we’re looking at the possibility of a Fed tightening cycle in early 2026, which could reverse gains,” she says. Chen also highlights that holiday spending and consumer confidence are still strong, supporting a more robust market environment.

• David Ruiz focuses on the year‑end tax implications that could spur buying. “Many investors may be looking to add to their portfolios before year‑end tax loss harvesting opportunities close,” Ruiz explains. “This can create a short‑term surge in equity demand.”

These voices collectively paint a picture of a mixed bag: potential for a rally exists, but it may be uneven and short‑lived.

4. Key Metrics to Watch in December

CNBC outlines a handful of metrics that traders and investors should monitor:

Traders will also keep an eye on earnings reports from the largest dividend‑paying companies, many of which will announce results in early December—an event that historically tends to lift the entire market.

5. The Bottom Line: A Decent Chance, But Stay Cautious

CNBC’s final assessment acknowledges that December has historically been a “nice, safe” month for the market—especially for investors who like to see a quick win before the holidays. Yet the article also urges caution:

• The low level of retail ownership could mean fewer people are buying into late‑year gains, potentially limiting the magnitude and duration of the rally.
• Macro risks—particularly a potential Fed rate hike in early 2026—could derail any gains that do materialize.
• Sector concentration is a factor: the rally may be dominated by tech and growth stocks, leaving more defensive sectors lagging.

In sum, the article presents a balanced view: while December still holds the traditional “Santa Claus rally” allure, the market’s unique blend of low retail ownership, high institutional activity, and favorable volatility conditions creates an environment that could see a rally but also invites a cautious approach.

In the words of CNBC’s anchor, “It’s a month of both opportunity and uncertainty.” Investors will be watching the coming days for signs of strength in institutional buying, a steadier inflation picture, and the broader macro backdrop that could either propel the market up or cause it to retreat. Whether the market ends December on a high note will depend on how these various threads weave together—and for many, the answer may arrive on the first trading day of 2026.