VIDEO: Will the Market Match Its Historical Friday the 13th Performance?

In today’s Dail Rundown video, Chris Versace explains the market’s typical December Friday the 13^th performance and uses that as a springboard to discuss its current setup and how we’re preparing for a potential Santa Claus rally. 

He also explains why Tech is leading the way today, and walks through last night’s quarterly results from Broadcom AVGO as he does so. That means discussing Broadcom’s bullish comments on AI and favorable notes that suggest the smartphone market may be stronger than expected. 

Transcript

CHRIS VERSACE: Hey, folks, Chris Versace here. It is, Friday, December 13. Yes, that's right, I said Friday, the 13. And whether or not you're a superstitious person or not, the S&P 500 has been up 8 of the last 13 Friday, the 13, in December since 1930, with an average gain of 0.06%.

So not the biggest move, but I have to be honest, when I think about those figures, 8 of 13, not exactly something to write home about. Why? Well, when you think about 5 over 13 or roughly 40%, there's a chance the S&P 500 may not be up on Friday, the 13, in December. And as of now, that is what we're looking at.

And if we close today in the red, it will mean a down week for the market. Here's the thing, though. While it is down, we are still not quite oversold on a short-term basis, but we are getting closer. And when we look at the technical work from Helene Meisler, she thinks that we could see a market rally unfold as we approach Christmas.

So cue the conversation about the Santa Claus rally. We will stay tuned and see if that starts to develop. But in the meantime, we are seeing some renewed weakness in some of our holdings. Builders FirstSource BLDR, for example, Lockheed Martin. And while we have committed some fresh capital to a number of positions earlier this week, we will want to be patient before we commit any additional capital.

Now, remember too, that as we start thinking about putting additional capital to work, we also downgraded our shares of PepsiCo PEP this week to a 4-rating. And our plan remains, to use any market strength to begin unwinding that position so we can minimize the impact on the portfolio. Should we see the market start to rally, as Helene thinks? Well, that means we will probably start to unwind that position and it could bring some additional cash into the portfolio. So as we make any moves, whether it's next week, or as we continue to evaluate new contenders for the portfolio as we move into 2025, we should have some additional firepower to put to work.

Now, as far as today's market action, we do have some comments from Broadcom regarding the strength it delivered and the continued strength it sees in AI, and that is helping tech outperform. It's also helping lift our shares of Marvell MRVL and NVIDIA NVDA today. As it relates to Marvell, the shares have been strong really since they reported their quarterly results. You saw us raise our price target in response, but comments this week from Oracle, Ciena, as well as Broadcom, all kind of reaffirming our thesis, not just on AI, but on the enterprise networking carrier infrastructure rebound have really helped lift Marvell shares.

And yes, we are enjoying it. But remember, we are prudent investors. So we are closely watching that 4.5% position size for Marvell shares. We're not there yet. But again, if we do see the market rally next week into the year-end holidays, if we see it hit that 4.5% level, maybe go a little above, we might have to do some prudent portfolio management, as we like to say. Now in breaking down Broadcom's results, we did talk about AI and what that meant for Marvell. But in our alert to you, we also touched on Broadcom's wireless business.

And reading between those lines, it kind of suggests that Apple's AAPL business might be performing pretty well in the current quarter and that it could deliver better than typical December to March quarter seasonality. Remember, when we think about the smartphone market and we think about industry shipments, there tends to be a seasonal drop when we go from the December quarter to the March quarter. Reason being is that the December quarter tends to really benefit from a full three months of new products being on the market and the holiday shopping season.

Now, Broadcom's comments, yes, for the wireless business, are positive. And you know that we are looking for the Apple iPhone upgrade cycle to ramp in the coming quarters, but we simply can't really rest on any one data point. We like to have multiple data points to really build our confidence and give us confirmation of what is happening. So, what does that mean?

It means that as we discussed in the alert, we will have things to pay attention to in the coming weeks and months. I'm talking about monthly revenue from Taiwan Semiconductor and Foxconn, both for December, but then again for January and February. Again, what we're looking to confirm is that the release of Apple's iOS 18.2 with renewed and expanded Apple Intelligence capabilities, is indeed igniting the iPhone upgrade cycle. Reviews for the iOS 18.2 update have been positive, and I have to share that this week I've walked through a couple Apple stores in the DC area and things are looking like they're starting to pick up. But again, we'll need more confirmation than just a couple stores and one data point from Broadcom.

As we get those confirmation points, it will not only be positive for Apple, it will be positive for our shares of Qualcomm QCOM and our shares of Universal Display OLED as well. So we'll continue to watch those. Be sure too, to read our note on Broadcom's comments regarding AI and wireless, because we do talk about something that's happening regarding Broadcom that I think the market's largely overlooking, which is the expected ramp down in its wireless business with Apple as Apple brings its Wi-Fi and Bluetooth chipset capabilities in house. If you're thinking that this sounds a little familiar, it is.

What we like about this is that the market is focusing on the larger opportunities ahead for Broadcom in AI and networking. Good for Marvell, obviously. But we also think that it means that as Qualcomm starts to deliver on its AI PC ramp, IoT programs, and automotive chip business, all the things that it outlined at its recent analyst day, as it delivers on those, the market will start to rethink how it values Qualcomm's shares, and that is the opportunity that we want to capture.

So we'll be patient and look for more data points as it relates to all of this. And of course, we'll be sharing our thoughts with you as we get them. Coming up later today, we will have our weekly roundup. And then over the weekend, we've got a new batch of signals to share with you on Saturday, followed by a fresh bowl of Sunday Soup the following day.

And then on Monday, we're going to break down our roadmap for the week with you. What do we have? Well, a quick preview-- retail sales, earnings from FedEx, Nike, and of course, the Fed's interest rate decision and updated economic projections. So, have a great weekend. Check your emails for what I just mentioned is about to come today, tomorrow, and Sunday. And we'll see you back here on Monday. Have a great weekend. 

At the time of publication, TheStreet Pro Portfolio was long BLDR, PEP, MRVL, NVDA, AAPL, QCOM and OLED.