Xmas Eve Special: Is the “Santa Rally” real? 🎅📈

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• What is the “Santa Rally”?
• Google Labs for a bit of fun
• Figure 02 hits up Deadmau5

If that’s enough to get the sleigh bells jingling, read on…

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Now, on with today’s issue…

Capital at risk.

AI Collision 💥

You hear it every year, you maybe even trade it every year, but what really is the so-called “Santa Rally” in the stock market?

The Santa Rally is a weird phenomenon in the stock market where stock prices are observed to rise during the last week of December and the first two trading days of January.

This term was first coined by Yale Hirsch in the 1972 edition of the Stock Trader’s Almanac, where he noted that the S&P 500 index tends to see gains during this specific period. The exact timing of this rally can vary slightly based on the calendar, particularly how weekends align with the holidays.

Historically, there’s sufficient data backing the occurrence of the Santa Claus Rally. According to various sources, since 1950, the S&P 500 has averaged a 1.3% gain during these seven trading days, with the market rising roughly 76% to 78% of the time during this period.

A 76% to 78% success rate… If that was a horse race, you’d be taking those odds.

For instance, data from the Stock Trader’s Almanac shows that over the last few decades, this trend has not only been consistent but also statistically significant when compared to other seven-day periods in the year.

However, the reliability of the Santa Claus Rally for predicting market trends has been debated. Some critics suggest that it’s nothing more than an urban myth and really just a self-fulfilling prophecy.

While there are years when the rally significantly boosts market gains, there are also instances where the market either shows minimal increase or even declines. For example, in years like 2000 and 2008, the absence of a rally coincided with broader market downturns in the following year, suggesting to some analysts that it might serve as a barometer for market sentiment into the new year.

The reasons behind this rally are speculative but often include lower trading volumes as institutional investors take holiday breaks, leading to a market more influenced by retail investors who might be more optimistic and speculative with their trades.

There’s also the theory of year-end bonuses being invested, holiday spending boosting consumer stocks, and general festive optimism.

Despite these theories, the market remains as unpredictable as ever. And if you want to know what we really think of the Santa Rally, well, let’s just say urban legend comes to mind. If you want to beat the market (so to speak) then invest regularly for the long term, and keep key investment mega trends front of mind like AI, quantum computing, bitcoin and crypto, autonomous systems and nuclear energy. Stick with those long term and we reckon you can’t go too wrong.

AI gone wild 🤪

There’s two things in today’s “Wild” section – a bit of fun to lead you into Christmas Eve tonight.

The first is if you want a bit of fun with the kids, grandkids, friends, anyone you’re hanging out with today, head on over to Google’s research page, Google Labs, and check out some of its tools.

The latest one (not available in all countries, so fingers crossed it works for you) is Google Whisk, a fun way to drop in different elements to AI image generations.

There’s AI image generators, games, assistants and a whole bunch of fun AI stuff to mess about with. It’s highly recommended and well worth a bit of time for fun and games with AI.

The second thing that’s a bit of fun, and I reckon I played this on repeat for a good ten minutes, is whatever happened with those Figure 02 robots…

Last Friday we wrote about a post from the founder and CEO of Figure Robotics, Brett Adcock, and how Figure had shipped a “fleet” of Figure 02 robots… to destination unknown.

Well, looks like we know where exactly two of them went!

I remember when Daft Punk’s pyramid set the stage (quite literally) for how EDM shows would evolve into more of an audiovisual spectacular. Maybe the next iteration of concerts and festivals add robotics into the mix…

Boomers & Busters 💰

**Due to holiday breaks, days off, closed markets and the fact pretty much everyone is on holiday, we’re pausing the Boomers & Busters section until we’re back on deck and keeping a closer eye on the market and market movers in AI.**

From the hive mind 🧠

• I’m quite enjoying the celebrity beefs in Hollywood around the use of AI, the future of AI and the threats of AI to their industry. And you know when Lisa Kudrow is taking shots at Tom Hanks, it’s a genuine free for all now!
• If AI reduces the cost and the hassle of getting medical testing for all kinds of disease and illness, surely that helps to reduce the burden on the NHS? Imagine if you could get a health check up, for everything within ten minutes, be in, out and know if you’ve got a clean bill of health…or not? If cost was lower (or nothing) thanks to AI and people could easily and readily get checked up, not only might the NHS improve, but lives may also be saved.
• OpenAI has been undertaking the “12 Days of AI” with new releases and features every day for a few weeks. Tech Radar has a great blog with everything that’s been going on and everything you can check out for yourself too.

Artificial Polltelligence 🗳️

The idea of AI improving healthcare is something we’re big advocates for as I’m sure everyone would be. But I wonder your thoughts on whether new tech like AI can actually make a dent in the improvement of care and services in the NHS?

Weirdest AI image of the day

The Merry Men, the terrorist group that believes in Santa Claus – r/weirddalle

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision