I put a question mark in the title, as there's still some uncertainty about how much mayhem there'll be. That being said, the ingredients are more or less coming together for a severe weather outbreak on Christmas Day in Louisiana, Mississippi, Alabama and the Florida panhandle.
Moisture, instability, shear and trigger will all be there, and I've got the corresponding maps below. But to summarize: dewpoints will be in the mid to upper teens; MLCAPE will be in excess of 1000 and, in some cases, 2000 J/kg; shear will be plentiful, with deep shear around 50 knots and 0-1 km shear around 30; the triggers will be numerous, including likely seabreeze interactions as well as a cold front.
So, what could happen?
Scenario 1) the warm sector lights up with tornadic supercells
Scenario 2) the warm sector is clagged in with low cloud and fog, eliminating any severe weather threat
Scenario 3) the warm sector is capped, leading to only cold front convection
Scenario 1 seems to be fairly likely right now, although there may be so many storms that they destructively interfere with one another. Scenario 2 looks unlikely, as for that to happen you need to have a strong inversion due to really warm air aloft (~850 mb) to trap things, and that's not currently forecast. Scenario 3 also looks unlikely, as there's little cap to speak of forecast.
The most favourable juxtaposition of instability and shear looks to be from about central Louisiana to western Mississippi, with a second area in southern Alabama. That being said, it appears that the strength of tornadoes may be somewhat mitigated because of what the forecast soundings in the warm sector are showing: modest, at most, low-level instability, usually necessary for strong low-level vertical motion. As well, low-level turning of the winds isn't tremendous, albeit adequate for tornadic supercells. If winds can back locally, though, then that'll increase the helicity a lot.
The place where forecast soundings do show stronger low-level instability is in western Louisiana, that being along the cold front. So if the cold front isn't too aggressive and surface winds can stay backed, the area of strongest storms and highest tornado chances would be here.
Last two things about these storms: they are going to have low cloud bases. As in almost at the ground. So any storms that do form will make it very dark, almost impossible to see what's coming. Second, a lot of these storms could go well after nightfall. If, indeed, they do contain tornadoes, this would be the most dangerous time--tornadoes at night are that much more dangerous.
I hope people keep an eye on the weather on the Gulf Coast on Christmas Day.