There’s something about the contrast between the cold winter weather and the warm optimism of Christmas that is especially good for the soul. It's the international season for hope, peace and reconciliation - and it’s a phenomenon that’s powerful enough to lift global financial markets, as well as the spirits of National Hunt racegoers.
The Santa Rally may sound like a fancy-dress car chase, but it is a recognised trend within the stock market calendar. Share prices have a tendency to rise during the last few days before Christmas and through until the New Year. A quick search of the internet reveals that the Dow Jones index has risen by an average of 1.7% each year during the 7-day Santa period since 1896, increasing in value in more than three years out of every four.
Analysis of the UK stock market by Hargreaves Lansdown reveals that, during the 30 years between 1985 and 2015, share prices on the FTSE All Share Index increased by nearly three times more in December than during an average month. A person who had invested £10,000 in 1985, but removed their money from the stock market every December for 30 years would have missed out on growth totalling nearly £80,000.
But the markets are discerning too – so the share price of ITV, where the live broadcasting of horseracing will commence on New Year’s Day, has risen by 14% in the two weeks since 1st December. Imagine how high they’ll be by the time the first races from Cheltenham and Musselburgh are shown on 1st January. Meanwhile, shares in Ladbrokes have fallen by 5% during the same period – presumably on the news of the massive punt that I’ve lined up for this weekend’s meeting at Haydock – the selection, a dual winner at Cartmel, is Morning Royalty.
The difference between Jimmy Moffatt’s horse winning and losing could be the difference between six bottles of Lambrusco Rosso for Christmas (£2.49 at Asda) or a case of Louis Roederer Brut Premier at around ten times the price. I’ve always maintained that there’s something rather charming about a glass of sparkling red wine, chilled and decanted into a stoneware jug so that no one can read the label. This year, apparently, red Lambrusco has become incredibly fashionable – but Mrs Garratt is having none of it. She's clearly as discerning in her choice of aperitif as she is in her choice of husband. Or so I'd like to believe...
Well I'm optimistic that peace will reign in the Garratt household, Morning Royalty will play his part and we'll toast our good fortune with a cold glass of Louis Roederer as we throw another log on the fire. Christmas approaches - good fortune to all!