S&P/ASX 200 Index (ASX: XJO) stocks are lower on Tuesday, down 0.39% to 8,390.3 points.
The benchmark index is down 0.54% this month, which goes against the grain of historical trends.
December is typically a strong month for ASX 200 stocks and is often referred to as the 'Santa Rally'.
According to five decades of data analysed by eToro, the ASX 200 delivered an average return of 1.78% in December compared to 1.36% across the 11 other months of the year.
In other words, 29% of the ASX 200's total average annual gains have historically occurred in December.
Sometimes, the Santa Rally begins early, and the benchmark's 3.38% gain in November certainly indicated that this year. November delivered the second-best rise of the year (ASX 200 stocks rose 4.18% in July).
So, it will be interesting to see if the market picks up some momentum over these next few weeks to deliver that usual December bump.
Further news of Chinese stimulus will undoubtedly play a role here. The market is looking ahead to Wednesday when the Central Economic Work Conference convenes in China.
Meantime, eToro analyst Josh Gilbert has nominated 3 stocks to watch this month, and why.
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3 ASX 200 stocks to watch in the final month of 2024
BHP Group Ltd (ASX: BHP)
The BHP share price is up 3.9% to $42.18 on a very strong day for ASX 200 mining shares.
Mining stocks are being buoyed by news that China intends to introduce more economic stimulus soon.
In a new article, Gilbert notes the impact of lower but still resilient iron ore prices on BHP this year.
The ASX 200 mining stock has fallen 16.6% in the year to date.
Gilbert writes:
However, iron ore prices are showing some resilience as we head into the end of the year, with a potential stimulus package from China early next year, offering some optimism.
To add to that optimism, the average crude steel output in the nation during the first 20 days of November reached the highest for that time of year since 2020, according to data from the China Iron and Steel Association.
BHP is also free to launch another attempt to acquire Anglo American as it looks to increase its copper exposure.
The case for increasing BHP's exposure to copper is only growing, with the asset a key commodity in the energy transition. For BHP, it looks to be an exciting December and a more positive one if iron ore prices stay elevated.
Flight Centre Travel Group Ltd (ASX: FLT)
The Flight Centre share price is down 1.5% to $16.44 on Tuesday.
The ASX 200 travel stock is down 19.6% in the year to date.
Gilbert says the journey back from the COVID slump has been a "turbulent one" for Flight Centre.
However, it is growing its revenues and operating more efficiently, reporting record profits in 2024.
Gilbert explains:
Despite recent challenges and increased competition from online travel platforms, the company's strong brand, wide geographic reach, and well-established presence in both leisure and corporate travel sectors have solidified its position in the industry.
It won't be a one-way flight to success for Flight Centre over the next 12 months, with its recent update a clear sign of that.
But, with an attractive valuation and record profits, the business looks to be making the right moves at the right times to get shares back to where they once were.
James Hardie Industries plc (ASX: JHX)
This ASX 200 materials stock is up 0.48% to $35.35 on Tuesday and down 7.7% year to date.
Gilbert sees tailwinds in 2025 for the home building materials supplier:
With US interest rates already being slashed by 75bps and set to fall further, we would expect to see an acceleration of homebuilding.
This would boost demand for building materials, putting James Hardie front and centre.
With US interest rates already being slashed by 75bps and set to fall further, we would expect to see an acceleration of homebuilding.
Lower rates and a favourable President-Elect create a promising environment for consumer spending on homes and business expansion, putting James Hardie in a strong position to benefit from increased demand in the housing and renovation sectors.
