top of page

Q4 2024 Analysis & Insights*

Updated on 10/1/2024

Q3 Analysis

(abbreviated version for non-clients)

Q3 was a surprisingly good quarter for most stocks, with the S&P 500 returning 5.4%, its best return since 2020 when it was up 8.6%. The average stock was up 9.1%. However, some of the largest and most widely held stocks had a poor quarter.

 

We ran a screen on the top 25 stocks by market cap, and the worst 6 stocks in that group, respectively, were GOOGL (down 8.9%), MSFT (down 3.7%), AMZN (down 3.6%), LLY (down 2.1%), and NVDA (down 1.7%). Of these 5 stocks, only MSFT had a weighted average 5 year return for Q3 that was negative, so it was the most consistent performer of the group.

Picture1.png

Q3 Fun Facts

  • Best performing sector was utilities 18.6% with real-estate next at 16.3% (based on Sector SPDR ETFs)

  • Worst performing sector was energy (3.7%) with technology next at (0.2%)

Picture2.png

  • Best performing stock GE Vernova (GEV) 48.7% with Palantir (PLTR) next 46.9%

  • Of the top-performing 25 stocks in the S&P 500, only TSLA up 32.2% (14th best) has a market cap > $100 billion

  • July was best month up 3.8% vs Aug up 0.4% and Sept down 3.1%. This was fairly consistent with the previous 5 years.

  • TSLA, META, AAPL all up >10% in Q3

  • META is the only stock here that was up in all 3 quarters this year AND it’s the only stock that has been up in each of the past 7 quarters.

image (1).png
Picture3.png

  • NVDA, AMZN, MSFT, and GOOGL all down with GOOGL the worst down 8.9%

  •  July was the best month. All 7 stocks were up, while TSLA was the only stock up in September.

  • These are 3 of the 6 stocks that beat S&P 500 5 out of 5 years. Each of these has Q3 2024 returns < (10%), so we wanted to see how their previous Q3 returns were. All 3 had 5 yr average Q3 returns < 0.

Volworks Insight: Investors should not be too concerned with their recent Q3 negative performance as that's been their pattern for the past 5 years.

image (1).png
image (1).png

Q4 Insights

  • Q4 is typically the best quarter of the year (6 out of the last 10 years)

  • 5 Yr weighted average return 9.9% for S&P 500 vs Q1 3.7%, Q2 2.6%, Q3 0.4%

* Investors that often sell covered calls, should be careful selling calls for Nov expiration as most of the 4th quarter’s returns are in Nov. On average, selling calls for Dec expiration the week of Nov expiration historically has been a much better strategy.

  • Mag 7 stocks 5 yr average return is 8.8% vs. 9.9% for the S&P. More interesting, Q4 is the 3rd best performing quarter with Q1 and Q2 much better over the past 5 years.

Picture4.png

  • Mag 7 stocks November was the best month in Q4 for all 7 stocks

Picture5.png

  • Chip stocks + SMH shows similar but better relative November performance. 75% of Q4 returns have been in November.

Picture6.png

  • The top 6 performing stocks for Q4 are all chip stocks (AVGO, ANET, AMD, KLAC, LRCX, MU)

  • Of the Top 100 stocks by market cap (>$103B), AMZN and META in the bottom 5 for Q4 average performance over the past 5 years.

Picture7.png

  • Best sectors: XLI, XLK, XLF

Picture8.png

  • While energy is in the lower half for performance for sectors, its Q1 returns are historically very strong. It’s a good candidate for a 3 month booster.

Picture9.png

S&P 500 Stocks

  • 6 of the Top 100 S&P 500 stocks by Market Cap beat the S&P 500 for the past 5 years.

image (1).png

  • CBRE is the only S&P 500 stock that outperformed the S&P 500 in each of the past 10 years. Note that we did not filter here for market cap.

image (1).png

  • BMY is the only stock in the Top 100 by Market Cap whose November Avg. Return was negative (-1.2%).

  • November had 1 stock that was negative (BMY) 

  • October had 15 stocks that were negative

  • December had 13 stocks negative

Magnificent 7 Stocks

  • November has been far and away the best month for these stocks averaging 8.8% for the past 5 years.

image (1).png

  • For NVDA, TSLA, MSFT, AAPL, the vast majority of their returns came in November.

image (1).png

Individual Sector Highlights

  • Consumer Discretionary is the only sector where the Equal-Weighted ETF (RSPD) significantly outperformed the SPDR Sector ETF (XLY). This is because AMZN with a weight of 21% had a 0.9% 5 Yr Avg Return and TSLA with a weight of 16% has a 6.3% 5 Yr Avg Return.

  • RSPD Return = 12.3%

  • XLY     Return = 5.5%

image (1).png

Return Calculations Methodology*

Volworks “Contextual Expiration Returns™” and other period returns (monthly, quarterly, 1st half and 2nd half of year, annual returns, etc.) utilize a recency-biased weighting scheme by default for multi-year returns. We feel overweighting more recent returns makes sense. However, for investors who don’t want to adjust for recency for past returns, our platform also calculates the mean and median returns, along with standard deviation, for all our stocks and ETFs with no weighting adjustments. This is a platform setting that can be changed instantly by each user. By default, Volworks returns and proprietary analytics are based on the past 5 years of data. (Note: the Volworks Platform contains data from as far back as 1960, but for a host of reasons, our primary and default focus is on the past 5 years.)

bottom of page