Santa Rally Uncertainty Looms in 2024

FINANCE
Santa Rally Uncertainty Looms in 2024

The "Santa Claus rally" is a year-end stock market trend where equities typically rise, offering investors a strong finish to the year. Historically, the second half of December is the second-strongest period for U.S. equities, with the S&P 500 gaining in December 74% of the time since 1950, rising to 83% during presidential election years, according to Bank of America. This year, the AI boom propelled stocks to impressive highs, but recent Federal Reserve actions on interest rates have dampened optimism, leaving investors questioning whether the rally will materialize.

The holiday season often brings muted trading activity as markets close early for Christmas and New Year’s. However, inflows from bonuses, tax-related trades, and fewer corporate announcements contribute to stable valuations. December’s gains are typically back-loaded, with momentum building mid-month, per LPL Financial.

Failure to deliver a holiday rally could signal trouble, as past dips during this period preceded major downturns like the dot-com bubble and the 2008 financial crisis. Despite a 1.5% decline this month, the S&P 500 is up 25% in 2024, poised for its fifth-best year since 2000.

Bank of America advises hedging against volatility, as lower trading volumes during the holidays could lead to sharper price swings for retail investors.

TECH
China Leads Global EV Market Growth

China remains dominant in the EV market as global sales continue to grow into 2025. Despite fears of an EV bust, sales in 2024 declined by just 1% compared to forecasts, with 15.2 million EVs sold worldwide by November—64% originating from China. Analysts credit Beijing's "cash for clunkers" subsidies and demand for new energy vehicles, including plug-in hybrids, for driving growth. Macquarie analysts expect China’s auto market to expand by 5% in 2024, far exceeding earlier projections of a 2% decline.

Plug-in hybrids surged, especially in China, where BYD sold 2.2 million units in the year’s first 11 months—a 70% increase. Analysts predict hybrids will continue outperforming battery electric vehicles next year, addressing range anxiety and charging infrastructure concerns. Global manufacturers increasingly pivot to hybrids as a short-term solution to bolster sales.

Chinese automakers are also expanding internationally, with exports projected to grow 29% in 2024. However, rising tariffs in regions like North America and Europe may push manufacturers toward friendlier markets, such as the Middle East and Latin America. Despite slower growth rates, EV exports are expected to make up 60% of China’s auto exports by 2030. The EV sector remains critical to reducing emissions and achieving global climate goals.

TECH
YouTuber Exposé Sparks Honey Controversy

Honey, a popular browser extension owned by PayPal, is under fire after a YouTube exposé by MegaLag accused it of deceptive practices. The video, viewed over 6 million times in two days, alleges Honey misleads consumers, steals affiliate commissions from influencers, and uses questionable tactics like opening hidden tabs to claim referral links.

MegaLag’s investigation claims Honey prioritizes its partnered stores’ coupon codes, even when better discounts exist, and overrides affiliate links from influencers, ensuring it earns commissions instead. Influencers like Linus Tech Tips, which promoted Honey in over 160 videos, ended their partnership upon learning about the alleged affiliate manipulation but kept the issue private.

Honey denies the accusations, stating it provides savings to shoppers and follows industry standards. Critics argue the practices harm consumers by hiding better deals and lead to merchants raising prices to offset losses from invalid codes. PayPal acquired Honey for $4 billion in 2020, and the extension has been featured in over 5,000 YouTube sponsorships.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.