December 18, 2024 • 5 mins
We're less than a week out from Christmas - and some key stocks could be well-placed for a Christmas charge-up.
The 'Santa Rally' phenomenon refers to a strong share market over the last 5 trading sessions in December, and the first 2 trading sessions in the new year.
Milford Asset Management's Stephanie Batchelor unpacks the phenomenon.
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Episode Transcript
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Speaker 1 (00:00):
Twenty two after six. Time to have a quick look
at the market. Stephanie Bachelor from Milford Asset Managements with me.
Speaker 2 (00:05):
Stephanie, Hello, good afternoon, Ryan.
Speaker 1 (00:07):
There's a phenomenon in the financial markets. They call it
the Center Rally. Apparently happens every year. What is it?
Speaker 2 (00:14):
Yeah, So the Center rally refers to the share market's
history of being really strong over the last five trading
sessions in December and the first two trading sessions in
the new year. If you go back and look at
every year since nineteen twenty eight, those seven trading sessions
have delivered positive returns almost eighty percent of the time,
and on average it's delivered a return of about one
(00:37):
point six percent. So it's a nice little gift from center.
Speaker 1 (00:41):
Is this what causes it? Because is this more just
that most traders are actually away on holiday at this time.
Speaker 2 (00:48):
Yeah, so that's part of it. It's not really known,
but there are a few theories. So one is that
it's a time when people get Christmas cash gifts or
work bonuses that they then want to put to work
in the markets. And because a lot of those professional investors,
as you mentioned, are off on holiday, there are fewer
trades happening, and so that can amplify share price movements.
(01:10):
Others kind of think it's just the general holiday optimism
that helps, or it could actually just be a bit
of a self fulfilling prophecy. Because people know about centa rally,
they invest in stocks to benefit from it, which in
turn pushes prices higher and kind of causes the center
rally in itself.
Speaker 1 (01:28):
We actually can't discount, Stephanie that it might actually be
Santa at work.
Speaker 2 (01:35):
True, I hadn't thought of their one.
Speaker 1 (01:37):
Nice to learn it for some people then if they
want to jump in at this time of year, what
Let's take a look back at the year that was though,
how global markets ended up in general. Obviously, the US
has been up heaps, Japan's been up heaps. Tell us
the numbers.
Speaker 2 (01:50):
Yeah, so it's been an incredibly strong year pretty much
all around. So, as you say, the US market has
been the strongest, up twenty seven percent, Japan also strong
eighteen percent, and actually China has done quite well since
the government announced stimulus measures, so that's kind of up
in the mid teens. And then we have New Zealand, Australia,
Europe all coming in around nine percent and the UK's
(02:12):
at seven percent, so pretty positive all round.
Speaker 1 (02:15):
What have been some of the big winners? You know,
I'm to thinking tech stocks AI.
Speaker 2 (02:20):
Yeah, So if we look at the MSCI World that's
the main global index, the best performing stock has been
a company called app Lovin, and it's up seven hundred
and sixty percent this year. So that's a technology company
that provides advertising solutions to gaming app developers. And then
the next one on the list is Palenteer, which is
(02:42):
up three hundred and forty percent, and again it's a
tech company. It offers software platforms to help companies better
analyze and utilize all the data that they that they have.
And both of these, as you say, they're considered AI stocks,
so that theme is very much alive and well. And
another name that people might recognize is robin Hood that's
(03:04):
coming in at number five, up two hundred and forty percent,
and that's the stock trading platform that became really popular
during COVID at.
Speaker 1 (03:11):
Love and I hadn't heard of that one before. I'm
just googling it now, really interesting company. Let's talk about
the big bad boy of well, not bad boy, but
the big boy of the poster child of AI, in Vidia.
How have they performed this year, because obviously they've had
a stellar run over the last four to five years.
Speaker 2 (03:28):
Yeah, they have, So it's it's still right up there.
It's number eight on the list, so a very healthy
up one hundred and seventy percent year to date, but
keep in mind that's after a very strong run, you know,
two hundred and forty percent last year, so very impressive
growth still for that one.
Speaker 1 (03:45):
And then now where their market cap is now more
than the next five listed a top five listed companies
or something ridiculous like that, and the companies that haven't
done so well steff this year, yeah yea.
Speaker 2 (04:00):
So in stark contrast to n video is actually another
semiconductor company called Intel, and it used to be the
largest computer chip maker, but it's more focused on legacy
PC chips rather than those kind of newer hother areas
of the market, which are GPUs and that's all about AI.
So shares of Intel are down about sixty percent this year.
(04:22):
And then another name people might remember is Maderna. So
it rolled out one of the first COVID vaccines back
in twenty twenty and shares did really well, but of course,
vaccine sales have fallen and it doesn't have enough of
the sort of other products or other vaccines to fill
the gap. So shares on this one are also down
about sixty percent this year.
Speaker 1 (04:43):
All right, Stephanie, thank you for that. Stephanie Batcheler Milford
Asset Management with a market wrap. Just coming up twenty
seven minutes after six year on news Talk, said be
lots more to come. After the news, I'll tell you
about the hunting accident in the United States. It's making
headlines still. It's a shocking store. Also, the bridge from
Winyard Quarter will get you from Silo Park to Winyard Quarter.
(05:05):
They fixed it ten million dollars again two times now
it's it's broken after being fixed, so we'll get to
look at that as well. For more from Heather Duplessy
Allen Drive, listen live to News Talks. It'd be from
four pm weekdays, or follow the podcast on iHeartRadio.
Twenty two after six. Time to have a quick look
at the market. Stephanie Bachelor from Milford Asset Managements with me.
Speaker 2 (00:05):
Stephanie, Hello, good afternoon, Ryan.
Speaker 1 (00:07):
There's a phenomenon in the financial markets. They call it
the Center Rally. Apparently happens every year. What is it?
Speaker 2 (00:14):
Yeah, So the Center rally refers to the share market's
history of being really strong over the last five trading
sessions in December and the first two trading sessions in
the new year. If you go back and look at
every year since nineteen twenty eight, those seven trading sessions
have delivered positive returns almost eighty percent of the time,
and on average it's delivered a return of about one
(00:37):
point six percent. So it's a nice little gift from center.
Speaker 1 (00:41):
Is this what causes it? Because is this more just
that most traders are actually away on holiday at this time.
Speaker 2 (00:48):
Yeah, so that's part of it. It's not really known,
but there are a few theories. So one is that
it's a time when people get Christmas cash gifts or
work bonuses that they then want to put to work
in the markets. And because a lot of those professional investors,
as you mentioned, are off on holiday, there are fewer
trades happening, and so that can amplify share price movements.
(01:10):
Others kind of think it's just the general holiday optimism
that helps, or it could actually just be a bit
of a self fulfilling prophecy. Because people know about centa rally,
they invest in stocks to benefit from it, which in
turn pushes prices higher and kind of causes the center
rally in itself.
Speaker 1 (01:28):
We actually can't discount, Stephanie that it might actually be
Santa at work.
Speaker 2 (01:35):
True, I hadn't thought of their one.
Speaker 1 (01:37):
Nice to learn it for some people then if they
want to jump in at this time of year, what
Let's take a look back at the year that was though,
how global markets ended up in general. Obviously, the US
has been up heaps, Japan's been up heaps. Tell us
the numbers.
Speaker 2 (01:50):
Yeah, so it's been an incredibly strong year pretty much
all around. So, as you say, the US market has
been the strongest, up twenty seven percent, Japan also strong
eighteen percent, and actually China has done quite well since
the government announced stimulus measures, so that's kind of up
in the mid teens. And then we have New Zealand, Australia,
Europe all coming in around nine percent and the UK's
(02:12):
at seven percent, so pretty positive all round.
Speaker 1 (02:15):
What have been some of the big winners? You know,
I'm to thinking tech stocks AI.
Speaker 2 (02:20):
Yeah, So if we look at the MSCI World that's
the main global index, the best performing stock has been
a company called app Lovin, and it's up seven hundred
and sixty percent this year. So that's a technology company
that provides advertising solutions to gaming app developers. And then
the next one on the list is Palenteer, which is
(02:42):
up three hundred and forty percent, and again it's a
tech company. It offers software platforms to help companies better
analyze and utilize all the data that they that they have.
And both of these, as you say, they're considered AI stocks,
so that theme is very much alive and well. And
another name that people might recognize is robin Hood that's
(03:04):
coming in at number five, up two hundred and forty percent,
and that's the stock trading platform that became really popular
during COVID at.
Speaker 1 (03:11):
Love and I hadn't heard of that one before. I'm
just googling it now, really interesting company. Let's talk about
the big bad boy of well, not bad boy, but
the big boy of the poster child of AI, in Vidia.
How have they performed this year, because obviously they've had
a stellar run over the last four to five years.
Speaker 2 (03:28):
Yeah, they have, So it's it's still right up there.
It's number eight on the list, so a very healthy
up one hundred and seventy percent year to date, but
keep in mind that's after a very strong run, you know,
two hundred and forty percent last year, so very impressive
growth still for that one.
Speaker 1 (03:45):
And then now where their market cap is now more
than the next five listed a top five listed companies
or something ridiculous like that, and the companies that haven't
done so well steff this year, yeah yea.
Speaker 2 (04:00):
So in stark contrast to n video is actually another
semiconductor company called Intel, and it used to be the
largest computer chip maker, but it's more focused on legacy
PC chips rather than those kind of newer hother areas
of the market, which are GPUs and that's all about AI.
So shares of Intel are down about sixty percent this year.
(04:22):
And then another name people might remember is Maderna. So
it rolled out one of the first COVID vaccines back
in twenty twenty and shares did really well, but of course,
vaccine sales have fallen and it doesn't have enough of
the sort of other products or other vaccines to fill
the gap. So shares on this one are also down
about sixty percent this year.
Speaker 1 (04:43):
All right, Stephanie, thank you for that. Stephanie Batcheler Milford
Asset Management with a market wrap. Just coming up twenty
seven minutes after six year on news Talk, said be
lots more to come. After the news, I'll tell you
about the hunting accident in the United States. It's making
headlines still. It's a shocking store. Also, the bridge from
Winyard Quarter will get you from Silo Park to Winyard Quarter.
(05:05):
They fixed it ten million dollars again two times now
it's it's broken after being fixed, so we'll get to
look at that as well. For more from Heather Duplessy
Allen Drive, listen live to News Talks. It'd be from
four pm weekdays, or follow the podcast on iHeartRadio.
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