This week’s all about what Jerome Powell has up his sleeve. With the Fed’s Dec. 17-18 meeting around the corner, traders are bracing for potential shifts in 2025 monetary policy. ❗ Expect more volatility ahead.

⚡ Closing Bell:

• Dow Jones: ⬇️ -0.20% to 43,828.1

• S&P 500: ⬇️ Virtually flat Friday 6,051.1, down -0.6% for the week.

• Nasdaq: ⬆️ +0.12% to 19,926.7 (4th straight weekly gain!)

• Russell 2000: ⬇️ -0.6% Friday, extending losses for small caps.

Sector Highlights:

• ✅ Technology: Continued its upward momentum, driving the Nasdaq higher.

• ❌ Communication Services: Took a hit as the biggest sector laggard.

Treasury yields climbed as inflation concerns took center stage:

• 10-Year Treasury Yield: ⬆️ hit a three-week high at 4.40% (+7.5 bps)

• 2-Year Treasury Yield: ⬆️ rose to 4.25% (+5.9 bps).

Some fun stats:

• Volume Recap: Friday saw 12.56B shares traded, below the 20-day average of 14.03B.

• Breadth: Decliners outnumbered advancers 2.23-to-1 on the NYSE.

• Market Highs and Lows: 75 new highs and 199 new lows on the Nasdaq.

❗ What’s Coming Up:
The Fed is poised to announce its next move, with a 97% chance of a 25 bps rate cut, but expect hawkish commentary and hints of a slower path for 2025 cuts.

Keep an eye on retail sales, housing starts, GDP revisions, and Friday’s PCE report, which could shake up markets.

#TRUTH:
❗❗❗ “Burning desire is the starting point of all achievement.” ~ Napoleon Hill

Final Lap:

With only a few trading days left in 2024, the S&P 500 is on track to close the year with a 27% gain, following a 24% jump in 2023. If it holds, it would be just the fourth time in the past century that the index has delivered consecutive 20%+ annual returns—the last occurrence being in the 1990s.

This year’s rally has been driven by AI enthusiasm, Fed rate cuts, and optimism about pro-market policies from POTUS-elect Trump. Wall Street is anticipating corporate tax cuts, deregulation, and a surge in dealmaking, particularly with the expected exits of FTC chair Lina Khan and SEC boss Gary Gensler.

The Nasdaq is set to outshine the S&P, powered by AI-focused stocks like Nvidia (NVDA) and Palantir (PLTR), both boasting triple-digit gains this year.

Yet, it wasn’t a win for everyone—around 20% of S&P 500 stocks are ending the year in the red. Among the biggest losers: Walgreens (WBA), Boeing (BA), Intel (INTC), and Moderna (MRNA).

As the year wraps up, tech continues to dominate, marking 2024 as one for the history books.

The King is dead, long live the King!

Broadcom’s shares skyrocketed +24.5% after reporting a 220% surge in AI revenue over the past year, catapulting its market cap past $1 trillion. With this milestone, Broadcom joins the elite “Magnificent 7” club alongside Apple, Tesla, Microsoft, and other tech giants.

But the Magnificent 7 moniker might need an update. Enter BATMMAAN—
~ Broadcom,
~ Amazon,
~ Tesla,
~ Meta,
~ Microsoft,
~ Apple,
~ Alphabet, and
Nvidia—stocks that now collectively command nearly $19 trillion in market value, dominating America’s stock market.

Broadcom, while not as recognizable as Apple or Tesla, has become an investor favorite thanks to its role in building the backbone of generative AI infrastructure.

AI’s influence connects these companies in diverse ways. Meta, Alphabet, Apple, Microsoft, and Tesla are embedding AI into their social media, search engines, smartphones, software, and vehicles. Meanwhile, Broadcom, Amazon, and Nvidia dominate the AI hardware scene, providing the servers, data centers, and chips that power this transformation.

Different industries, one driver: AI. These BATMMAAN stocks are shaping the future, and their influence isn’t slowing down anytime soon.

To the Moon 🔝:

Tesla (TSLA) is having a moment. Shares roared +4.34% on Friday to a record $436.23, wrapping up the week with a whopping 12% gain. Since Trump’s election win last month, Tesla has surged 73%, and it’s not just because of Elon Musk’s charm.

Call it the Trump Effect. Investors are betting big on Musk’s influence in the incoming administration, with reports that Team Trump may roll back NHTSA’s crash-reporting rules for self-driving cars—a headache Tesla could happily do without. So far, Tesla’s had to report over 1,500 crashes tied to its Full Self-Driving and Autopilot systems.

It’s not all politics, though. In China, Tesla smashed records, selling 21,900 EVs in the first week of December. November was a banner month too, with 73,000 units sold, thanks to juicy perks like 0% loans and 10,000-yuan discounts (~$1,400).

Analysts are riding the hype wave:

• Deutsche Bank bumped its price target to $370, seeing big gains from Tesla’s robotaxi ambitions under a more relaxed regulatory climate.

• Morgan Stanley’s Adam Jonas upped his target to $400, naming Tesla his “top pick” amid buzz around AI, renewables, and Musk’s growing political clout.

• BofA’s John Murphy isn’t holding back either, hailing Tesla’s autonomy potential.

Bottom line? Tesla isn’t just building cars; it’s building momentum. With Musk in the spotlight and markets in his corner, it’s shaping up to be a December to remember.

AI 💰:

The AI gold rush has a new trillion-dollar player. Broadcom (AVGO) surged 20% on Friday, propelling the VanEck Semiconductor ETF (SMH) up 2%. But not everyone’s winning—Nvidia (NVDA) sank 2.3%, as the AI boom shows no signs of easing its supply squeeze.

Right now, it’s a bottleneck economy:

• Microsoft (MSFT) can’t scale its AI capabilities fast enough due to a data center shortage, even with the US leading the pack globally.

• Nvidia’s new chips are selling faster than they can make them, leaving unmet demand.

Broadcom isn’t the only one eyeing Nvidia’s turf. Heavyweights like Amazon and Apple (partnering with Broadcom, no less) are diving into AI hardware. The more competitors succeed, the more Nvidia’s dominance could erode.

Nvidia remains the best-performing chip stock of 2024, riding AI mania to the top. Yet, those sky-high expectations come with risks. After Nvidia’s blazing hot earnings run, it looks like the gains may have been borrowed from the future, and its peers are starting to catch up.

For Nvidia, the AI boom is both a blessing and a burden—because even when you’re on top, the fall is just that much further.

Hold Ground 🛢️:

Crude prices held their ground after a strong week, with Brent steady above $74 and WTI near $71.

The big driver?

• US Signals Tougher Russian Sanctions: Treasury Secretary Janet Yellen hinted at lowering the price cap on Russian crude to tighten Moscow’s purse strings.

• China’s Economic Pledge: Regulators vowed to boost growth, a potential win for the world’s largest oil importer.

The Bearish Side:

• China Demand Slips: November oil demand fell 2% YoY, with home sales and consumer spending also sliding.

• Supply Overhang?: Analysts see Brent falling to $70 in 2025 as non-OPEC+ supply growth outpaces global demand.

Around the Globe:

• OPEC+ Moves: The UAE plans to cut exports in early 2025, signaling tighter production quotas.

• Global Oversupply Looms: Geopolitical risks are supporting prices now, but oversupply fears are keeping markets cautious.

For now, oil’s stuck between supply fears and a bearish long-term outlook. Whether prices push higher or start to slip will depend on how these forces play out.

🧩 Movers:

• Spotlight ✅ / At the Bottom ❌

  • ✅ Broadcom (AVGO): +24% after forecasting Q1 revenue above estimates and crossing a $1T market cap, fueled by surging AI chip demand.

  • ✅ Marvell Technology (MRVL): +10.8%, buoyed by the chip sector’s rally.

  • ✅ Tesla (TSLA): Rose 4.3% on hopes of relaxed self-driving regulations under the incoming Trump administration.

  • ✅ Semiconductors (SOX): ⬆️ +3.2%, with a mixed bag of winners and losers.

  • ❌ Nvidia (NVDA): -2.2%, showing mixed results amid AI-driven gains.

  • ✅ RH: +16.9% on stronger-than-expected revenue growth.

  • ❌ Under Armour (UA): -8.1% as growth concerns linger.

  • ❌ Airbnb (ABNB): -4.7%, marking the steepest S&P 500 drop on Friday.

Commodities Check: ✔️

• Crude Oil (WTI): ⬇️ $70.96 per barrel, down 0.46%

• Brent Crude: ⬇️ $74.25 per barrel, down 0.32%

• Gold: ⬇️ $2,671.30 per ounce, down 0.17%

• Silver: ⬇️ $30.98 per ounce, down 0.15%

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.