Apex Radar - Week 1

December 30 - January 3 2024

Jan 05, 2025

Weekly check of the market

Magnificent 7, Nasdaq and S&P500

This week marked the transition between the final days of 2024 and the start of 2025. After five consecutive sessions of negative performance, both the Nasdaq and S&P 500 posted gains on the second day of 2025, though not strong enough to offset weekly losses. The Nasdaq slipped by 0.51%, and the S&P 500 edged lower by 0.48%, with the bulk of the selling pressure centered on large-cap equities. Conversely, mid and small-cap stocks recorded slight gains. Investor optimism, however, remains high, as reflected in Bank of America’s Sell Side Indicator, which rose to 57.0% in December, nearing thresholds typically linked to market “euphoria.”

The notable underperformer this week was Tesla, which ended with a weekly decline of 4.92%. At one point, the stock was down as much as 10% for the week, but a rebound on Friday helped mitigate the loss. The decline was largely driven by Tesla's first-ever report of a drop in annual deliveries and an incident involving a Cybertruck explosion in Las Vegas.

The second notable outlier was Apple, which fell 4.79% for the week. The decline was driven by reports of a $95 million settlement with users whose conversations were inadvertently recorded by Siri and potentially overheard by human reviewers. Additionally, Apple faced headwinds from a 47% plunge in phone sales in China, as competition from Huawei intensified.

Microsoft also ended the week down 1.67%, following reports of plans to invest $80 billion in data center expansion during this fiscal year. This underscores the significant capital demands of artificial intelligence. Over half of this projected spending, which runs through June 2025, will occur in the United States.

The final member of the "Magnificent 7" to finish the week in the red was Google. The stock faced pressure, largely due to a downgrade by JMP Securities, which cited ongoing antitrust concerns. Aside from the announced partnership with Synaptics to advance AI technology in IoT, there was little additional major news impacting the stock this week.

Meta recorded its second consecutive week of gains, rising 0.8%, driven by positive news that WhatsApp secured approval to expand its P2P payments service to its full user base in India. However, heightened volatility is expected to continue as markets closely watch developments around TikTok regulations.

Amazon ended the week largely flat, posting a modest gain of 0.2%, bolstered by updates on Project Kuiper. On Sunday, Ofcom confirmed it is “still considering Amazon’s application for an Earth Station Network licence,” a key step for enabling Kuiper to operate broadband terminals in the UK.

Nvidia emerged as the standout performer this week, gaining 5.44% on a weekly basis. Market enthusiasm is building ahead of CEO Jensen Huang's keynote address at CES 2025 tomorrow, where the industry anticipates significant announcements, particularly around advancements in AI and GPU technology that could shape Nvidia's future trajectory. Additionally, Nvidia entered a partnership with Cerence AI to enhance AI-driven voice recognition systems for the automotive sector, further solidifying its position as a leader in AI innovation.

While major U.S. indexes posted weekly declines, Bitcoin once again surprised the market with a strong recovery after the New Year. Rebounding from lows of $92,000, Bitcoin ended the week above $98,000, representing a weekly gain of approximately 5-6%. This resilience highlights its continued momentum despite broader market challenges.

Fear & Greed Index

The Fear & Greed Index dipped slightly from 34 to 32 during the first week of 2025, indicating a marginal decline in sentiment. Despite this, the reading reflects a continued sense of calm and stability among investors.

CBOE Volatility Index (VIX)

The final two days of 2024 saw heightened volatility, contributing to an initial spike in the VIX. However, market calmness returned later in the week, with the VIX ending the week up by a modest 1.13%. At 16, the VIX reflects a moderate level of expected market volatility, indicating stable investor sentiment.