After Wednesday’s adrenaline rush, Wall Street hit the brakes Thursday, as traders tried to make sense of mixed signals from the economy and corporate boardrooms. Call it the “morning after” for stocks—still buzzing, but feeling the weight of reality.

⚡ Closing Bell:

• Nasdaq: ⬇️ -0.9% to 19,338.3—tech stocks took the brunt of the beating.

• S&P 500: ⬇️ -0.2% to 5,937.3—drifting lower with mixed sector performance.

• Dow Jones: ⬇️ -0.2% to 43,153.1—anchored by a UnitedHealth slump.

Economic Snapshot:
Retail sales growth cooled in December, and unemployment claims edged higher. However, homebuilder confidence unexpectedly rose, and manufacturing activity in the Mid-Atlantic hit multiyear highs.

Meanwhile, Fed Governor Christopher Waller hinted at possible rate cuts in 2025 if inflation keeps cooling—a glimmer of hope for rate-sensitive markets.

Sector Moves:
✅ Utilities: The day’s top performer, offering some stability amidst the declines.
❌ Technology: The worst hit, pulling the Nasdaq deeper into the red.

❗ What’s Next? Traders are keeping an eye on earnings season and economic data, with markets on edge as the tech retreat continues to ripple through major indexes.

#TRUTH:
❗❗❗ “Life’s greatest successes often lie just beyond the point where most give up.” ~ Napoleon Hill

Not feeling it 💔:

Palantir is back in the spotlight, logging its third straight session of gains Thursday, as the defense and intelligence software giant claws back some of the 20% it lost earlier this year. This rebound comes on the heels of a jaw-dropping 340% gain in 2024, making it the biggest gainer in the S&P 500—and a favorite among retail traders.

But Wall Street? Not so much.

Professional analysts are giving Palantir (PLTR $69.33, +1.61%) the side-eye, with a consensus target price of $46.38—a full 35% below where the stock is currently trading.

What’s the Deal?
It’s not that Palantir’s business is faltering. On the contrary, analysts have been steadily raising their estimates for both sales and profits, thanks to strong demand for its AI-driven commercial products and ongoing government contracts.

• Revenue Expectations: Palantir is projected to report $778 million in Q4 revenues on Feb. 3—a 28% jump year-over-year.

• Net Income: Not as shiny, though. GAAP net income is expected to rise just 11% to $103.5 million.

Why the Skepticism?
Palantir’s meteoric rise last year was fueled more by retail trader hype than hard-nosed analysis. The “vibes-based” momentum made it a darling of individual investors but left Wall Street analysts scratching their heads.

And as this year’s rocky start has shown, when the hype train slows down, the fallout can be brutal. Palantir’s story may not be over, but with its stock still flying high, the question remains: Is the price tag justified, or is the market just along for the ride?

$5M Bet:

More than cleaning fees: Airbnb ABNB $132.16 (-0.31%) is doubling down on lobbying to overturn NYC’s tough short-term rental rules, reportedly shelling out $5M to back pro-home-sharing politicians.

A quick rewind: In 2023, NYC cracked down on short stays (under 30 days) by mandating hosts stay onsite during rentals and limiting guests to two. The result? Airbnb lost 80% of its NYC listings within a year, along with millions in revenue. Meanwhile, hotel prices skyrocketed, with September rates hitting a record $417/night.

Beyond NYC: The battle isn’t just local. Airbnb is challenging

crackdowns in other cities, like Barcelona, which plans to ban short-term rentals by 2029.

Fighting back: Airbnb isn’t alone. Rental platforms like Expedia’s Vrbo EXPE $188.67 (1.15%) are pushing back after post-pandemic travel booms triggered scrutiny from governments and lobbying from the hotel industry. In 2024, short-term rental supply slowed in 17 of North America’s 30 largest cities.

Lobbying spree: Airbnb spent $1M+ lobbying NY lawmakers last year, more than the past five years combined. Expedia ramped up lobbying by 60%. History says this strategy works—Airbnb previously spent $8M in 2015 to defeat stricter rules in San Francisco, successfully keeping its foothold.

The takeaway: With cities tightening rental regulations, Airbnb and its peers are turning to their checkbooks to sway the narrative. In this tug-of-war, the stakes are high—and so are the lobbying budgets.

Fight for Survival:

TikTok’s countdown: With a US ban looming this Sunday, President-elect Donald Trump is reportedly weighing an executive order to delay enforcement for 60-90 days. But legal experts warn: this move faces steep challenges.

A brief rewind: Congress passed the TikTok ban to address national security concerns, requiring parent company ByteDance to divest its US operations. The Supreme Court is reviewing whether the ban violates the First Amendment, while ByteDance scrambles to find a buyer to meet the deadline.

Legal hurdles: Trump’s executive order would likely face resistance. The 1952 Youngstown Steel case, which limited presidential power in overriding federal laws, looms large. Analysts say such a move would stand on shaky ground unless the Supreme Court rules the ban unconstitutional.

Big Tech’s bind: Companies like Apple and Google would be on the hook to remove TikTok from their app stores, while Amazon, Microsoft, and others would need to cut off hosting. Even if Trump avoids enforcing penalties, tech giants must decide whether to take the risk.

Plan B: Trump could pressure Congress to extend the ban deadline—legislation to delay it by 270 days is already in play—or facilitate a sale. Reports suggest Elon Musk as a potential buyer for TikTok’s US operations, valued between $40-$50 billion. While Chinese officials prefer ByteDance retains ownership, a Musk deal remains a contingency option.

The takeaway: As the clock ticks down, TikTok’s future hangs by a thread. Trump’s potential moves, from executive orders to last-minute lobbying, face formidable legal and political obstacles. For now, it’s a high-stakes waiting game for TikTok, its users, and Big Tech.

Busy Day:

Ripple’s generosity: Ripple donated $100,000 in XRP to California fire victims through The Giving Block and made additional contributions in its new stablecoin RLUSD. Could RLUSD soon feature in Cardano’s DeFi ecosystem? Talks are underway to integrate the stablecoin, signaling a potential Ripple-Cardano partnership.

Congress joins the crypto wave: Congressman Guy Reschenthaler disclosed buying XRP, BTC, and SOL, becoming the first U.S. politician to publicly purchase XRP.

ETFs on the horizon? JPMorgan predicts that if ETFs for XRP and Solana get the green light in the U.S., they could attract $14 billion in assets within a year, representing 3-6% of their market caps.

Big moves in Europe: Italy’s largest bank entered the crypto space, buying 11 BTC—a $1M statement of confidence in Bitcoin.

Regulatory rumblings: Robinhood agreed to a $45M SEC settlement over trading misreports and cybersecurity issues, even as its Q3 trading volume reached $14.4B.

Looking ahead: The TON blockchain eyes U.S. expansion, aligning with President-elect Trump’s crypto-friendly policies, including plans for a Bitcoin strategic reserve. Could this mark the start of a “crypto golden age”?

Stock Stories:

• ❌ UnitedHealth Group (UNH): ⬇️ -6.04%, a big miss on revenue spooked investors, making it the S&P 500’s worst performer.

• ✅ Morgan Stanley (MS): ⬆️ +4.03%, strong investment banking results powered its stock higher.

• ✅ DexCom (DXCM): ⬆️ +5.52%, the day’s best performer on the S&P 500 after an analyst upgrade.

• ❌ Bank of America (BAC): ⬇️ -0.98%, despite solid earnings, investors remained cautious.

• ✅ TSMC (TSM) ⬆️ +3.99%: Bright earnings and an optimistic outlook energized the semiconductor giant.

• ✅ Rivian (RIVN) ⬆️ +3.62%: Riding high on reports of billions in new financing from the Biden administration.

• ✅ Uber (UBER) ⬆️ +2.37%: Wall Street’s positive commentary gave the ride-sharing giant a lift.

Elsewhere in the Market
Southwest Airlines (LUV) stumbled ⬇️ 1.91% following a Department of Transportation lawsuit alleging chronic flight delays.

The Magnificent 7 cohort? Every member slid, with Apple and Tesla leading the declines:

• ❌ Apple (AAPL) ⬇️ -4.05%: Worst day since March, losing ground amid reports of shrinking market share in China.

• ❌ Tesla (TSLA) ⬇️ -3.44%: A reality check after Wednesday’s rally.

Winning Streak:

Oil prices kept climbing today, aiming for their fourth weekly gain. Brent crude edged up to $81.42 a barrel, while WTI rose to $78.95, buoyed by U.S. sanctions on Russian oil and whispers of Fed rate cuts sparking optimism in the markets.

What’s driving the rally?

• Sanctions ripple effect: U.S. measures targeting Russian oil producers and tankers are tightening supply, sending shipping rates soaring as buyers scramble for alternatives.

• Cold comfort: Freezing weather in the U.S. is boosting kerosene demand, adding upward pressure on prices.

• Rate-cut talk: Federal Reserve Governor Christopher Waller hinted at potential faster-than-expected cuts, adding a boost to oil demand expectations.

Global factors in play:
Middle East tensions eased as the Houthi militia signaled a pause on ship attacks in the Red Sea, but investors remain cautious, with threats of resumed violence looming over shipping routes.

The bigger picture:
Year-to-date, Brent is up 9%, and WTI has climbed 10%, as markets juggle geopolitics, weather patterns, and central bank signals. For now, crude remains on its winning streak.

Commodities Check: ✔️

• WTI Crude: ⬇️ -1.8% to $78.63 per barrel.

• Gold: ⬆️ +1% to $2,745.20 per ounce.

• Silver: ⬆️ +0.2% to $31.60 per ounce.
  

The Dollar:

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Disclaimer

This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills.