The week to come will be a short one for investors with markets closed on Monday, Dec. 25 for the Christmas holiday. However, it could still bring plenty of action, with many investors likely hoping for a “Santa Claus rally” to close out the last trading week of the year on a high note. Bond markets will close early at 2 p.m. on Friday, Dec. 29. Few economic releases are scheduled over the holiday week, but some could shed added light on the state of the U.S. housing market. The S&P Case-Shiller Home Price Index and data from the National Association of Realtors on pending home sales will be due. Weekly initial jobless claims are scheduled for release as well, along with inventory and trade balance data. The holiday sales season will also continue throughout the week, with heavy markdowns expected as retailers move to clear their inventories.

Expect Discounts as Retailers Clear Inventories
It’s the final week of sales for the 2023 holiday shopping season and retailers are expected to offer deals to move inventory. It’s projected to be the sixth-busiest shopping day of 2023 when stores reopen on Tuesday, Dec. 26, as retailers like Amazon, Nike and Target plan on rolling out post-Christmas sales. Another popular shopping day will be Saturday, Dec. 30, projected to be the ninth-busiest of the year.

Housing Data Comes as Market Shows Improvement
After a string of reports suggesting improving conditions in the nation’s housing market, the S&P Case-Shiller Home Price Index due for release Tuesday could provide insight into the latest trends on housing affordability. On Thursday, NAR will also release the latest data on pending home sales, an indicator of future market condition, which comes after the latest report on existing home sales showed sales rose 0.8% in November. The recent housing market data builds on increased homebuilder confidence, which in December rose for the first time in four months.

Will There Be a Santa Claus Rally?
While there’s no guarantee, it’s possible markets could get a boost from a “Santa Claus rally,” over the last few trading days of the year. Since 1945, the S&P 500 has gained over the final five trading days of the calendar year and the first two of the new year 77% of the time, according to CFRA Research. There is no definitive explanation for this seasonal trend, but holiday shopping, seasonal optimism, and institutional investors settling their books have all been cited as possible contributing factors.