The semiconductor sector drove Monday’s market rally as U.S. restrictions on China’s access to chip technology turned out to be less harsh than feared.

⚡ Closing Bell:

• Dow Jones: slipped ⬇️ -0.29% to 44,782

• S&P 500: ⬆️ +0.2% to 4,506.12

• Nasdaq 100: ⬆️ +1.1% to 15,895.46

• Russell 2000: ⬆️ +0.1% to 1,757.68

Sector Scorecard:
→ Winners: Tech, consumer discretionary, and communication services shined.
→ Lagging sectors: Utilities, real estate, and energy fell over 1%, dragging behind the broader market.

The VanEck Semiconductor ETF (SMH) climbed 2.4%, with standouts including:

• Lam Research (LRCX): ⬆️ +6.3%

• Applied Materials (AMAT): ⬆️ +4.9%

The day’s biggest winner was Super Micro Computer (SMCI), skyrocketing 28.6% after an internal review cleared its management of misconduct allegations. Meanwhile, Intel (INTC) struggled, briefly boosted by news of its CEO’s retirement before closing ⬇️ 0.5% lower.

Other Movers:

• Jeep maker Stellantis (STLA): ⬇️ -6.4% following its CEO’s resignation.

• Targa Resources (TRGP): ⬇️ -4.8% as warm winter forecasts weighed on natural gas prices.

Semiconductors drove gains, but the broader market saw mixed results, keeping the spotlight firmly on tech as a potential leader heading into the final stretch of the year.

#TRUTH:
❗ “By the time a man is wise enough to watch his step, he’s too old to go anywhere.” ~ Billy Crystal

Tech Power 💪:

Tech took the lead once again, with the technology, communication services, and consumer discretionary sectors all posting solid gains of around 1%. Tesla made the biggest splash, soaring 3.46% after Stifel raised its price target, adding more fuel to its post-November momentum.

Meanwhile, manufacturing data provided a pleasant surprise. ISM reported activity at 48.7, a better-than-expected result, while the S&P manufacturing survey saw an upward revision to 49.7, hinting at some stability in a sector that’s been under pressure.

And then there’s Super Micro Computer (SMCI), which stole the show. The company skyrocketed nearly 30% after news broke of a search for a new finance chief, spurred by a special committee’s recommendations to address accounting concerns.

But as optimism lingers, so does uncertainty. November’s rally, fueled by Trump’s election win and Republican dominance in Congress, has investors hoping for tax cuts and deregulation. Yet the shadow of potential tariffs and ambiguity around the new administration’s economic strategy looms large, tempering the market’s enthusiasm.

❗This Raised Eyebrows:

On Monday, a wallet tagged as “US Government: Silk Road DOJ Confiscated Funds” transferred 19,800 Bitcoin, valued at around $1.9 billion, to an exchange. Blockchain data revealed the move, triggering a slight dip in Bitcoin’s price as traders braced for a potential sell-off.

The timing adds intrigue, as President-elect Donald Trump recently announced plans for a national “Bitcoin reserve,” aiming to halt the sale of seized crypto to solidify the U.S. as a global crypto leader.

With this transfer, speculation is swirling: will these Bitcoins hit the market or form part of Trump’s proposed reserve?

For now, Bitcoin traders are keeping a close watch as the government’s crypto moves continue to stir volatility and uncertainty.

Fully Stocked:

The U.S. is heading into the 2024–25 winter with 3,922 billion cubic feet (Bcf) of natural gas in storage—the most since 2016. Even with smaller-than-usual injections during the warmer months, storage levels finished 6% above the five-year average, providing a healthy buffer for the colder months ahead.

What’s Behind the Surge?

• Strong Start: Inventories were already well-stocked at the beginning of the injection season, so operators didn’t need to refill as aggressively.

• Lower Output: Cheap natural gas prices in 2024 prompted producers to dial back, meaning there was less supply to inject into storage but no shortage to meet demand.

• Finishing Strong: Operators ramped up injections in October, boosting reserves just before the season wrapped.

Regional Twists

Unusual summer withdrawals in regions like the South Central and Pacific broke the mold. These withdrawals—driven by cooling demand—led to a rare summer net withdrawal of 6 Bcf in August, something the U.S. hasn’t seen since 2016.

Winter Outlook

• Steady Supplies: The EIA predicts 1,957 Bcf will be withdrawn this heating season, leaving storage still 6% above the five-year average by spring.

• Efficient Management: Operators injected 21% less gas this year compared to average, showcasing smarter storage strategies.

The bottom line? The U.S. heads into winter with a well-prepped safety net, ready to handle whatever Mother Nature has in store.

Loosing Grip:

Google’s dominance in the lucrative search-ad market is showing cracks. Once the undisputed leader, the tech giant faces rising competition from players like Amazon and AI-driven tools, pulling users—and their ad dollars—away.

The Numbers:

• $175 Billion Revenue: Google raked in this sum from search ads alone in 2023, accounting for 57% of Alphabet’s total sales.

• Sub-50% Market Share: Google’s share of the global search-ad market is expected to dip below 50% in 2024, per eMarketer—the first time since tracking began in 2008.

• Slowing Growth: While Google’s search-ad revenue is growing at a modest 7.6% annually, Amazon’s surged by 17.6% over the same period.

Main Drivers:

• Amazon Rising: Increasingly, users are heading to Amazon for product searches, bypassing Google entirely.

• AI Disruption: Tools like chatbots are transforming the way people search, with nearly 60% of U.S. consumers using AI to make purchase decisions in the last 30 days, per New Street Research.

• Retail Media Boom: Spending on retail media platforms like Amazon grew 28% year over year in Q3, while social platforms like Meta saw a 5% rise. Google? A modest 3% growth.

The Bigger Picture

Google’s search-ad revenue remains a powerhouse, but the landscape is shifting. As Amazon, AI tools, and platforms like TikTok lure users and advertisers, the tech giant’s share of the pie is shrinking. For Google, maintaining its relevance in a rapidly changing ad market will require innovation—and perhaps a new strategy.

Big Bet:

Jeff Bezos is diving into the AI chip race, betting on Tenstorrent, a company challenging Nvidia’s dominance. Through Bezos Expeditions, his private investment arm, he joined a $693 million funding round, alongside LG Electronics, Fidelity, and South Korean firms Samsung Securities and AFW Partners.

Tenstorrent’s Game Plan
Tenstorrent wants to make AI more accessible by using open-source technology and skipping expensive components like high-bandwidth memory (HBM), which gives Nvidia a pricing edge. CEO Jim Keller says this approach allows Tenstorrent to offer affordable AI solutions for smaller companies struggling to compete with Big Tech.

Takeaway:
Nvidia dominates the AI chip market, generating $35.1 billion in quarterly revenue, with much of it coming from giants like Meta, Alphabet, and Microsoft. Smaller firms are often priced out, which is where Tenstorrent sees an opportunity.

With Bezos’s support and nearly $700 million in new funding, Tenstorrent is gearing up to bring AI technology within reach for more businesses, taking on Nvidia in the process.

Elon Musk’s $56 Billion Payday Hits 🪨:

Tesla’s monumental $56 billion pay package for Elon Musk just got slammed by a Delaware judge—again. Chancellor Kathaleen McCormick doubled down on her January ruling, citing conflicts of interest and misleading shareholder disclosures as key reasons for invalidating the compensation deal.

What Happened?

McCormick ruled that Tesla’s attempt to address the issues with a second shareholder vote wasn’t enough. The company had argued that forming a special committee and seeking fresh shareholder approval resolved earlier concerns. But the judge called it “creative yet fatally flawed.”

Tesla’s claim? Musk deserved the payout as a reward for driving Tesla to astronomical growth.
The court’s view? The vote was tainted by conflicts and inaccurate information, meaning Musk’s mega-compensation still doesn’t pass legal muster.

Fallout

Tesla isn’t walking away quietly. The company plans to appeal, which could send this high-stakes case to the Delaware Supreme Court—or even the U.S. Supreme Court. Meanwhile, Tesla stock rose ⬆️ 3.46% Monday, though it dipped 1.2% in after-hours trading as the ruling made waves.

Takeaway

With Musk’s attention already stretched thin between Tesla, SpaceX, and xAI—not to mention his new advisory role in President-elect Trump’s administration—the decision raises fresh questions about how much of his time Tesla can expect.

For now, the historic pay package remains off the table, leaving Musk and Tesla to fight another day in court. Whether the billionaire can steer this one back on track—or if it’s destined to be one of his rare losses—remains to be seen.

The Dollar 💵:

• Dollar Index: ⬆️ 0.64% to 106.46

• EUR/USD: ⬇️ to $1.0551

• USD/JPY: ⬆️ to 151.56

• USD/CNY: ⬆️ to 7.25

Commodities Check: ✔️

• Gold: ⬇️ -0.9% to $2,630.99 per ounce

• U.S. crude: ⬇️ -0.43% to $68.63 per barrel
  Brent crude: ⬇️ -0.92% to $72.38 per barrel

• Silver: ⬆️ -0.68% to $29.90 per ounce

Get a Serious Trading Platform and a Sweet Bonus.
» Find out more

The stinger

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.