Ahead of the Curve

Market Overview

• The S&P and Nasdaq ended the week in the red, each falling more than 2% after the Federal Reserve announced a cautious approach to future rate cuts. This outlook triggered a sell-off, though markets slightly rebounded by Friday.

• Bitcoin dropped below $94,000 after peaking above $108,000 earlier in the week.

  • The surge above $108,000 was fueled by President-elect Donald Trump’s suggested plan to create a U.S. Bitcoin strategic reserve.

  • The U.S. government currently holds $22 billion worth of Bitcoin.

• Less importantly, the Dow hit a 10-day losing streak on Thursday.

Economic Insights You Need to Know

• The Fed cut interest rates by 25 basis points as expected, but investors did not like its cautious outlook on future rate reductions. 

  • The Fed signaled only two rate cuts in 2025, with a similar pace through 2027, eliminating hopes for a faster pivot toward lower rates that could boost economic growth and housing. 

• On a brighter note, the Fed raised its 2024 GDP growth projection to 2.5% and adjusted its unemployment outlook downward, signaling a resilient economy despite lingering inflation concerns.

• Beyond the Fed, Congress continues to work on a significant spending package to avoid a government shutdown. President-elect Trump and Elon Musk have voiced opposition to a proposed stopgap measure, adding to the tension. 

  • History shows that even during periods of government dysfunction, markets recover, underlying the importance of maintaining a steady, disciplined approach to your portfolio management despite the insane headlines you might come across this week.

    

    
    

Stock of the Week: Palantir Technologies Inc.

• Palantir (NASDAQ: PLTR) has secured a $600 million contract extension with the U.S. Army, building on its 2018 agreement. The company’s Vantage software will enhance the Army’s efficiency and decision-making capabilities. Following the announcement, Palantir shares rose nearly 3% in morning trading.

  

  
  

U.S. Business News

• Amazon warehouse employees across California, New York, Illinois, and Georgia are going on strike just before the holiday rush. Represented by the Teamsters union, workers and Amazon failed to reach a new contract agreement by the December 15 deadline. While the timing is challenging for Amazon during its busiest season, the company stated that it doesn't anticipate disruptions to its holiday operations. The Teamsters represent about 10,000 of Amazon’s more than one million warehouse employees, which is a small percentage of the workforce. 

• Microstrategy is officially being added to the NASDAQ 100 index. Boosted by its Bitcoin holdings (approximately 420,000 BTC), the company’s stock has surged nearly 600% this year.

• Apple is reportedly developing a foldable iPhone (expected in 2026) and an ultra-thin model slated for 2025, aiming to drive future revenue growth.

• Broadcom shares jumped another 11% on Monday, capping a staggering 40% increase within a week.

• FedEx plans to spin off its freight division into a separate publicly traded company within the next 18 months. The announcement boosted FedEx shares by approximately 2.6% in early trading. Analysts estimate the freight division could be valued at up to $33 billion. The two entities will continue to cooperate on commercial, operational, and technology initiatives.

• The CFPB has sued JPMorgan Chase, BofA, and Wells Fargo, alleging the banks of inadequate fraud detection, poor identity verification, and neglecting customer support after scams occurred on Zelle payments platform. Customers reportedly lost over $870 million, with over 900,000 fraud complaints filed. Zelle criticized the CFPB’s fraud loss figure as "misleading," while JPMorgam called the lawsuit a “political agenda”.

• Waymo announced it will be expanding internationally and testing its autonomous vehicles in Tokyo. The company also has plans to expand domestically next year into Austin, Miami, and Atlanta.

• Japanese automakers Honda and Nissan are exploring a potential merger. If the two companies were able to secure a deal, it would become the third largest automaker in the world by sales. The companies have struggled to compete with rivals, including Tesla and BYD. Nissan has lost significant profit and announced massive job cuts this year. 

• Starbucks baristas in Chicago, Los Angeles, and Seattle launched a five-day strike amid stalled contract negotiations with the company. Workers United, representing over 11,000 employees, criticized the company’s wage proposals. Starbucks has defended its pay structure, citing an average wage of over $18 per hour.

Overseas Updates

• According to Reuters, the Trump transition team is reportedly considering measures to scale back federal support for EVs and charging infrastructure while increasing policies to restrict EV-related imports from China. 

  • Proposed changes include the potential removal of the $7,500 federal tax credit for EV buyers, alongside global tariffs on battery materials to encourage domestic production.

  • Reuters suggests the motivations include bolstering national defense, protecting U.S. automakers, and promoting gas-powered vehicle production. 

  • However, major U.S. automakers like Ford, GM, and Stellantis have voiced concerns, emphasizing that the tax credits help keep American companies competitive globally and create jobs. 

• On Monday, former President Trump met with SoftBank’s renowned Japanese CEO, Masayoshi Son. During the meeting, Son announced a plan to invest over $100 billion in U.S. projects within the next four years. The investments aim to generate over 100,000 jobs, with a focus on AI and other emerging technologies. 

• China is seeing historic yield drops as the one-year sovereign bond yields in China fell to 0.92%, the lowest since 2009. Ten-year bond yields decreased to 1.74%, continuing a trend since breaching the 2% barrier earlier this month.

News in Sports

• NFL

  • Thursday Night Football: The Los Angeles Chargers defeated the Denver Broncos 34-27

  • Sunday Night Football: The Dallas Cowboys will host the Tampa Bay Buccaneers

  • Monday Night Football: The Green Bay Packers play the New Orleans Saints

• NCAA Football

  • Playoff Games:

    • 7 Notre Dame vs. 10 Indiana

    • 8 Ohio State vs. 9 Tennessee

    • 6 Penn State vs. 11 SMU

    • 5 Texas vs. 12 Clemson

• NBA

  • Western Conference Standings: Oklahoma City Thunder, Memphis Grizzlies, Houston Rockets

  • Eastern Conference Standings: Cleveland Cavaliers, Boston Celtics, New York Knicks

Closing Remarks

• Instagram is expected to generate $32 billion in advertising revenue in 2025.

• Goldman Sachs cites that the U.S. accounts for 50% of the global stock market.

• Americans are estimated to have spent around $973 billion on holiday shopping in 2024.

• The markets close early on Christmas Eve at 1 p.m. ET, and will be closed on Christmas and New Year’s Day.

Stay with us for more insights next week.

Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.