Apex Radar - Week 52

December 23 - December 27 2024

Dec 29, 2024

Weekly check of the market

Magnificent 7, Nasdaq and S&P500

In Week 52, the Nasdaq and S&P 500 posted gains of 0.76% and 0.67%, respectively, during the light-volume, holiday-shortened week, signaling the arrival of the long-anticipated "Santa Claus Rally." Even Friday's sudden selloff, coinciding with South Korea's impeachment of its acting president, appears to have had little impact on the broader market narrative.The drop was likely due to investors cashing in profits and adjusting their portfolios for the year-end, moving money from stocks to bonds. Experts note that the excitement in the market has cooled, with a more cautious outlook now in place. However, things like political instability or changes in Fed policies could still cause sudden market swings.

In contrast to the previous week, where Tesla and Meta were among the biggest laggards, both emerged as top performers this week. Tesla gained 2.52%, while Meta rose 2.49% on a weekly basis. Uncertainty surrounding a potential TikTok ban continues to generate short-term momentum for Meta’s stock. Meanwhile, Tesla is striving to break its previous delivery record. Analysts anticipate a new quarterly high for vehicle deliveries; however, it remains uncertain whether this will be sufficient to achieve year-over-year unit delivery growth.

Apple made significant strides this week, nearing the unprecedented milestone of a $4 trillion market capitalization, fueled by the broader Santa rally. The stock closed the week 0.43% higher, buoyed by key announcements, including its decision not to pursue the development of its own search engine. Instead, Apple reaffirmed its strategic partnership with Google, defending the tech giant in ongoing antitrust trials over revenue-sharing agreements that designate Google as the default search engine on Safari. This stance underscores Apple’s focus on prioritizing cost-efficiency and avoiding conflicts with its privacy-centric ecosystem.

Meanwhile, Google also ended the week on a positive note, gaining 0.71%. The company continues to face scrutiny over its dominance in online search but maintains investor confidence through its robust AI advancements and partnerships like the one with Apple.

Amazon declined for the second consecutive week, falling 0.52%, amid reports highlighting serious injuries among its UK workforce, including bone fractures and instances of unconsciousness. Unions have attributed these incidents to the intense pace at Amazon’s facilities, especially those using robotics. In response, Amazon asserts that its injury rates remain well below industry averages and underscores its ongoing investments in safety enhancements.

Like Amazon, Microsoft also saw its stock decline for the second consecutive week, this time leading losses among the "Magnificent 7" companies. It was one of only two to end the week in negative territory, down 1.39%, despite the Nasdaq and S&P 500 posting gains. Microsoft recently integrated its AI assistant, Copilot, into its Microsoft 365 consumer subscription service in Australia and Southeast Asia. However, the move has faced criticism, as it includes a mandatory price increase for all users, with no option to opt out for those who do not wish to use the AI assistant.

Euphoria around Bitcoin appears to be fading, with the cryptocurrency trading below the $100K mark throughout the week. Despite attempts to breach $100K amid the broader Santa rally in equities, Friday’s market selloff pushed Bitcoin further away from the milestone. It is now consolidating within the $93,000-$94,000 range, reflecting a 1.2% decline on a weekly basis.

Fear & Greed Index

Although the Fear & Greed Index rose from 28 to 34, market sentiment remains cautious as we close the year. Investors are adopting a cautious stance, with 2025 expected to be shaped by transformative AI advancements and significant political shifts, which could drive both sector-specific and macro trends.

CBOE Volatility Index (VIX)

The VIX dropped 13.13% in Week 52, driven by a modest Santa rally, as expected. However, Friday brought a spike in volatility, likely influenced by political tensions, such as South Korea's impeachment of its acting president, and year-end profit-taking and portfolio rebalancing by large institutional investors.