Santa, why didn't you stay longer?

Officially, Santa's rally is the last five trading days of December and first two trading days of January. Over this period the S&P gains 1.3% on average. This year, during Santa’s rally the S&P 500 increased by 1.4%. BUT, most of the gains happened in the first two days - December 27 and 28. From December 29 until January 4, the Index's performance was flat.

This resulted from the poor performance of the most safe-haven mega caps, such as Meta (FB), Amazon (AMZN), Netflix (NFLX), Google (GOOGL) and Microsoft (MSFT). Apple (AAPL) was somewhat unique, as its market value went up somewhat.

The two sectors that picked up the slack were Energy and Travel. From December 29 until January 4, Vanguard Energy ETF and Defiance Hotel, Airline & Cruise ETF went up by 6.2% and 4% respectively.

It seems that, during Santa's rally, the market went from favoring expensive safe-haven mega-caps to favoring high-beta reopening plays that went through a bear market in November and December. At the same time, the Energy sector remained popular as a potential play on reopening and a hedge on inflation.

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