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Electric Cars

When Consumers Should Purchase Electric Cars Before Tax Credit Ends

2024-12-06

President-elect Donald Trump has signaled his intention to end the consumer tax credit for electric vehicle purchases upon taking office. This development has sparked significant discussions among industry experts and consumers alike. In this article, we will explore when consumers should consider buying electric cars and the potential impacts of this policy change.

Uncover the Optimal Time to Purchase Electric Cars

Section 1: The Current State of Electric Cars

Electric cars have come a long way in recent years. They offer numerous benefits such as lower emissions, reduced fuel costs, and advanced technology. According to recent statistics, the global electric vehicle market is expected to grow at a rapid pace in the coming years. Many major car manufacturers are investing heavily in electric vehicle production, which is driving down prices and increasing availability. However, there are still some challenges that need to be addressed, such as charging infrastructure and range anxiety.

Section 2: The Impact of the Tax Credit End

The end of the consumer tax credit for electric vehicle purchases could have a significant impact on the market. Some experts predict that it may lead to a decrease in demand for electric cars in the short term. However, others believe that it could also stimulate innovation and drive down prices further. It is important for consumers to understand the potential implications of this policy change and make informed decisions. For example, those who are looking to purchase an electric car in the near future may want to consider doing so before the tax credit expires.

Section 3: Factors to Consider When Buying Electric Cars

When deciding whether to buy an electric car, there are several factors that consumers should consider. Range is one of the most important factors, as it determines how far the car can travel on a single charge. Charging infrastructure is also crucial, as it affects the convenience of owning an electric car. Additionally, consumers should consider the cost of ownership, including the purchase price, fuel costs, and maintenance expenses. It is important to do thorough research and compare different models before making a decision.

Section 4: The Future of Electric Cars

Despite the challenges, the future of electric cars looks promising. Advancements in battery technology are expected to lead to longer ranges and faster charging times. Governments around the world are also implementing policies to promote the adoption of electric cars, such as setting emissions targets and providing incentives. As the technology continues to improve and the infrastructure expands, electric cars are likely to become more mainstream. This could have a significant impact on the automotive industry and the environment.

The Santa Rally is a fascinating aspect of the stock market, where equities have historically shown stronger gains during the final stretch of December. This trend, often influenced by factors such as holiday cheer, year-end portfolio rebalancing, and investor optimism, has been a recurring pattern for decades. But what exactly makes December stand out, and which stocks have historically outperformed during this period? Let's delve into the numbers and uncover the secrets of this seasonal sweet spot for stocks.

Unlock the Potential of the Santa Rally with These Top Stocks

December: A Seasonal Sweet Spot For Stocks

After a remarkable rally in November, with the S&P 500 – as tracked by the SPDR S&P 500 ETF Trust SPY – surging by 6%, there is a sense that momentum could carry forward into December. George Smith, the portfolio strategist at LPL Financials, believes that historically, December has been a good month for stock market seasonals. Since 1950, December ranks as the second-best month for the S&P 500, delivering an average return of 1.6%. Only November performs slightly better, with a historical average of 1.8%. Smith further highlights that the second half of December typically accounts for the majority of these gains, giving rise to the well-known "Santa Rally" effect. Data shows that stocks tend to experience a lull or even a slight decline during the first half of the month. However, as mid-December approaches, momentum begins to build, and the upward trajectory gains steam. Near the 11th trading day of the month, the upward movement starts to accelerate, leading to the expected Santa Rally.

Top 10 S&P 500 Stocks With Strong Christmas Seasonality

For investors seeking to capitalize on the Santa Rally, certain stocks have a proven track record of delivering significant gains in the latter half of December. Looking back at the past 20 years of data, here are the top 10 S&P 500 stocks that have historically shown the strongest average returns between Dec. 12 and Dec. 31:Illumina, Inc. ILM has an average return of +4.94% and a median return of +5.17%. It has witnessed a maximum profit of +19.39% and a maximum loss of -10.98%. With a win ratio of 75% and a Sharpe Ratio of 4.27, it is a stock that has performed exceptionally well during the Christmas season.Invesco Ltd. IVZ has an average return of +4.34% and a median return of +3.04%. It has achieved a maximum profit of +23.10% and a maximum loss of -5.10%. With a win ratio of 80% and a Sharpe Ratio of 3.72, it is another stock that has shown strong Christmas seasonality.Valero Energy Corporation VLO has an average return of +3.78% and a median return of +4.37%. It has reached a maximum profit of +12.89% and a maximum loss of -8.52%. With a win ratio of 80% and a Sharpe Ratio of 3.70, it is a reliable performer during this period.Western Digital Corporation WDC has an average return of +3.73% and a median return of +3.84%. It has achieved a maximum profit of +24.23% and a maximum loss of -13.26%. With a win ratio of 70% and a Sharpe Ratio of 2.75, it is a stock that investors should consider.Mohawk Industries, Inc. MHK has an average return of +3.47% and a median return of +2.19%. It has reached a maximum profit of +20.26% and a maximum loss of -4.35%. With a win ratio of 70% and a Sharpe Ratio of 3.18, it is a stock with good Christmas seasonality.Freeport-McMoRan Inc. FCX has an average return of +3.34% and a median return of +4.60%. It has achieved a maximum profit of +25.84% and a maximum loss of -15.06%. With a win ratio of 75% and a Sharpe Ratio of 2.03, it is a stock that has performed well during the Christmas season.BlackRock, Inc. BLK has an average return of +3.32% and a median return of +3.62%. It has reached a maximum profit of +11.64% and a maximum loss of -1.69%. With a win ratio of 80% and a Sharpe Ratio of 3.49, it is a reliable stock with strong Christmas seasonality.Global Payments Inc. GPN has an average return of +3.30% and a median return of +3.35%. It has achieved a maximum profit of +12.38% and a maximum loss of -8.28%. With a win ratio of 80% and a Sharpe Ratio of 3.44, it is a stock that investors should keep an eye on.CBRE Group, Inc. CBRE has an average return of +3.20% and a median return of +3.24%. It has reached a maximum profit of +13.27% and a maximum loss of -7.11%. With a win ratio of 75% and a Sharpe Ratio of 2.22, it is a stock with good Christmas seasonality.Royal Caribbean Cruises Ltd. RCL has an average return of +3.14% and a median return of +1.80%. It has achieved a maximum profit of +36.95% and a maximum loss of -14.54%. With a win ratio of 55% and a Sharpe Ratio of 2.36, it is a stock that offers potential during the Christmas season.These stocks have demonstrated consistent performance during the Christmas season and could be valuable additions to an investor's portfolio. However, it's important to note that past performance is not indicative of future results, and investors should conduct thorough research and analysis before making any investment decisions.

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CNBC TV's Producers at Work

As the S&P 500 retreated from its record, CNBC TV's producers were closely monitoring the market. Reagan National Defense Forum was a key event, with Morgan Brennan live in California. The iShares US Aerospace & Defense ETF (ITA) is 3.3% from its recent high, while Archer Aviation has soared 135% in a month. Rocket Lab USA has doubled in value, and Axon Enterprise is up 56%. AeroVironment, focused on drones, is down about 25% in a month and 30% from its 52-week high. Wahid Nawabi, CEO of AeroVironment, will be on CNBC TV with Brennan at 5 p.m. Eastern.The numbers for volatility remain historically low. Kelly Evans spoke with market veteran Jay Bowen on "The Exchange" at 1 p.m., who predicted more volatility and 5 to 10% pullbacks.

Software to Lead the Way?

Renaissance Macro's Jeff deGraaf noted on "Closing Bell" that Nvidia's chart is just OK while Microsoft is starting to break out. Microsoft is 5.5% from its July high and up 4.5% in four days, with a 17% gain in 2024. The iShares Expanded Tech-Software Sector ETF (IGV) is up 34% in 2024 and hit a new high this week. DeGraaf believes software will be the tech leader into 2025, outperforming chips. The VanEck Semiconductor ETF (SMH) is up 42% year to date but 12% from its July high.

The New Industrials

Kelly Evans profiled guests recommending "industrial technology companies, disguised as regular industrials." Bowen highlighted names like Eaton, Corning, Teledyne, and Parker Hannifin. Eaton is up about 10% in a month and 2.4% from its Nov. 26 high. Corning is up 5% in a month and 2.5% from its Oct. 29 high. Teledyne is 3% from its November high and up about 11% in three months. Parker Hannifin is 2.5% from its Nov. 25 high and up 21% in three months. Talen Energy hit a new high on Thursday but dropped 2.5% from that level. It's up about 18% in a month and 54% in three months. Quanta Services is 4.3% from its Nov. 26 high, up 6.5% in a month and 33% in three months. Clean Harbors is 7.6% from its late October high. Cummins hit a new all-time high on Thursday and is up about 28% in three months and 58% in 2024.

Dollar General's Story

CNBC stock man Tom Rotunno monitored Dollar General on Thursday. The company missed earnings expectations and ended flat at the close. CEO Todd Vasos noted less customer traffic in the last week of the month as customers struggle. Dollar General is also testing same-day delivery in dozens of stores. Both Dollar General and Dollar Tree are more than 50% from their March highs.

Amazon on the Rise

Amazon hit a new all-time high on Thursday. It's up 7.2% in a week and about 11% in a month. Thanks to CNBC's Chris Hayes for the stat.

Uber and Lyft on the Road

On Friday, we'll keep an eye on Uber and Lyft. Both stocks took a hit on Thursday, falling roughly 10% each. They are both about 25% from their 52-week highs. The ride-sharing stocks dropped after Alphabet's Waymo announced it's moving into the Miami market and launching a robotaxi service in 2026. There's a lot of action in the market, and we'll see what happens next.