In contrast to last week's relatively quiet holiday trading action, this week could feature some volatile movements. Three big, market-moving events will take place next week and could determine whether the Santa Claus rally continues or falters.
With the S&P 500 only up 1.5% this year, the performance next week will help decide whether the index finishes in the green for 2015.
Black Friday Sales
The holiday shopping season unofficially kicks off the day after Thanksgiving, or on "Black Friday." Early sales estimates for the three-day weekend that includes Black Friday should be available early this week, and may push the market one way or the other.
Retail ETFs like the SPDR S&P Retail ETF (XRT | A-52) and the Market Vectors Retail ETF (RTH | A-81) may be the biggest movers on these figures. However, it's important to note that Black Friday sales aren't necessarily indicative of how the entire holiday shopping season will turn out.
For example, last year, the National Retail Federation reported that Black Friday weekend sales declined by 11%, but by the end of the year, total holiday retail sales ended up rising by 4% year-over-year.
European Central Bank Decision
The European Central Bank (ECB) is widely expected to provide more stimulus when it makes its next monetary policy decision on Thursday. Economists anticipate that the central bank could expand its 60 billion euro a month quantitative easing program, cut its already-negative deposit rate further or unveil new measures altogether.
Expectations of more stimulus have pushed the dollar sharply higher against the euro, with the PowerShares DB US Dollar Index Bullish ETF (UUP | B-73) up nearly 9% this year. At the same time, hopes for stimulus have benefited ETFs such as the exporter-heavy WisdomTree Europe Hedged Equity ETF (HEDJ | B-49), which has smartly outperformed this year, with a 14% return.
If the ECB disappoints, that could spell bad news for these ETFs. However, if it delivers enough stimulus to satisfy investors, the rally could continue.