Apple Inc. (NASDAQ:AAPL) shares have risen by 3% so far today, the last day of 2012. The rise in the technology company’s shares has been complemented by a rise in the NASDAQComposite (INDEXNASDAQ:.IXIC), and the S&P 500 (INDEXSP:.INX). The rise is unexpected on a day in which Fiscal Cliff negotiations could lead to a renewed recession in the United States.
The second half of 2012 has not been brutal by any means, but it certainly has not lived up to the promises set by the move in equities in the first six months of the year.
Even with today’s rise, Apple In. (NASDAQ:AAPL) has lost more than 10% of its share value in the last six months, though the firm marks a 2012 growth of almost 30%. The company’s shareholders are hoping for something very different in 2013.
The S&P 500 (INDEXSP:.INX) has also experienced a lackluster second half of 2012. In the last six months the index has risen by a shade less than 3.5%. That compares with a growth of more than 20% in the first half of the year.
The NASDAQComposite (INDEXNASDAQ:.IXIC) increased by almost 5.5% in the first half of 2012. If the term is shortened to exclude the Facebook Inc (NASDAQ:FB) IPO, the index gained almost 11.5%. In the second half of the year, the firm has gained just over 2%.
Something has certainly been rotten in the second half of 2012 in the equities market, though returns are still possible. Several explanations for the lower returns are viable.Though it is difficult to tell which, if any, is most culpable for a market which has not moved much in 6 months.
European problems could be blamed, though they were more prominent in the first half of the year. The Facebook Inc (NASDAQ:FB) IPO probably ushered in a more bearish market for tech stocks, including Apple Inc. (NASDAQ:AAPL) stocks, but can hardly be blamed for all of the world’s problems.
Election pressures can surely not be blamed as the market, unless oblivious of the opinion polls, could not have expected anything but a second term for Barack Obama. Fiscal Cliff pressures have only really come into play in the last fortnight. The easiest explanation is, of course, that the returns of the second half of the year were “pulled forward” into the first half by good economic data and corporate profits.
Despite the trend toward lower returns in the latter half of the year, and fiscal cliff pressure mounting, the NASDAQComposite (INDEXNASDAQ:.IXIC), the S&P 500 (INDEXSP:.INX), and Apple Inc. (NSDAQ:AAPL), are all rising. There is then, some optimism heading into 2013.
The market seems to expect that House Republicans and the President will reach an agreement sometime this afternoon, and delay the economy, once again, from going over the fiscal cliff. It is unlikely to be a full budget this late in the game. We are more likely to see a mini deal, similar to the one put into action at the same time last year.
The market is clearly alright with such a deal. The rise in the S&P 500 (INDEXSP:.INX) signifies an unwillingness on the part of the market to expect a real deal on the country’s future, instead there’s optimistic buying backed by the hope of a temporary fix.