First-Timer:
The Nasdaq Composite made history on Wednesday, soaring past the 20,000 mark for the first time. Tech stocks roared back, while inflation data came in as expected, cementing hopes for a rate cut at next week’s Federal Reserve meeting.

⚡ Closing Bell:

• Nasdaq Composite: ⬆️ +1.8% to 20,034.9 — Big tech carried the day to a record close.

• S&P 500: ⬆️ +0.8% to 6,084.2 — Led by consumer discretionary and communication services.

• Dow Jones: ⬇️ -0.2% to 44,148.6 — Health care weighed on the index.

• Russell 2000: ⬆️ +0.5% to 2,405.16 — Small caps chipped in with modest gains.

Sector Highlights:

• Best Performer ✅: Communication Services — Alphabet’s rally was the highlight of the day.

• Biggest Decliner ❌: Health Care — Losses in major names dragged the sector down.

Treasury yields reflected a cautiously optimistic outlook on inflation progress:

• 10-Year Treasury Yield: ⬆️ +5.2 basis points to 4.27%.

• 2-Year Treasury Yield: ⬆️ +1.0 basis points to 4.16%.

The Magnificent 7 Shine:

• Alphabet (GOOG): ⬆️ +5.5% — Gemini 2.0 AI launch fueled optimism.

• Tesla (TSLA): ⬆️ +5.9% — Hit a new record high after over three years.

• Broadcom (AVGO): ⬆️ +6.6% — Top gainer, boosted by its AI chip partnership with Apple.

❗ What’s Coming Up:
The November Producer Price Index (PPI) report is due Thursday, expected to provide another layer of insight into inflation trends. For now, with the CPI meeting expectations, the market is nearly unanimous in betting on a 25-basis-point rate cut next week.

Will the PPI confirm the Fed’s inflation fight is cooling, or surprise with a plot twist? Investors are ready to find out.

#TRUTH:
❗❗❗ “Patience is bitter, but its fruit is sweet.” ~ Aristotle

Stays Sticky :

November’s inflation report kept traders and economists buzzing Wednesday as consumer prices rose 0.3%, as expected. While inflation remains above the Federal Reserve’s 2% target, the data solidified expectations for another 25-basis-point rate cut at next week’s FOMC meeting.

The Consumer Price Index (CPI) climbed 2.7% year-over-year, slightly above October’s 2.6%, marking the biggest monthly increase since April. On a core basis—excluding food and energy—prices rose 0.3% month-over-month, with annual core inflation holding steady at 3.3% for the fourth consecutive month.

The sticky details?

• Shelter costs remained a heavyweight, contributing nearly 40% of the monthly inflation gain.

• Food prices proved stubborn, rising 0.4%, with notable jumps in egg prices (+8.2% month-over-month).

• Used car prices reversed course, ticking up 2% in November after months of declines.

Energy prices, however, painted a more muted picture, rising just 0.2% month-over-month, while falling 3.2% year-over-year as global oil markets stabilized.

What This Means for the Fed

Despite progress on inflation, the Fed’s path to its 2% goal is proving more incremental than groundbreaking. Economists highlighted housing inflation as the persistent “elephant in the room,” although there’s hope that new leases at lower rates will eventually cool the shelter index.

But that’s not the only curveball. President-elect Donald Trump’s inflationary campaign promises—think high tariffs, corporate tax cuts, and immigration restrictions—are stirring concerns about potential price surges in 2025.

Markets are confident, though. Odds for a rate cut jumped to 97%, with traders betting on a less aggressive pace of cuts in the new year.

The Standouts

• Shelter inflation moderated slightly, with rent and owners’ equivalent rent both rising 0.2%, their smallest gains since 2021.

• Food at home prices rose 0.5%, while food away from home edged up 0.3%.

• Lodging away from home spiked 3.2%, reversing October’s modest 0.4% gain.

Egg lovers, take note: Prices cracked higher, surging 8.2% month-over-month after a surprising decline in October.

While the Fed’s December rate cut looks like a done deal, the January FOMC meeting could take on a more cautious tone, with policymakers weighing Trump’s economic policies and inflation’s sticky categories.

Zen Mode Activated 🧘‍♂️:

Google’s latest quantum breakthrough turned heads this week as Willow, its new chip, solved a problem in five minutes that would take modern supercomputers 10 septillion years. The crypto world raised an eyebrow, fearing that such advancements could one day undermine bitcoin’s encryption—the backbone of its $2 trillion blockchain ecosystem.

Key concerns:

• Private keys, essential for bitcoin transactions, rely on encryption that quantum computers could theoretically crack.

• Bitcoin dipped briefly on the news but quickly rebounded as fears proved premature.

Keep calm and hodl on:

• Crypto leaders, including Ethereum co-founder Vitalik Buterin, reassured investors that blockchains can adapt. Just as bitcoin’s Taproot upgrade boosted security in 2021, quantum-proofing is seen as a future upgrade, not an existential crisis.

• Quantum computing remains far from breaking bitcoin. Willow’s achievement, while groundbreaking, has no immediate commercial application and poses no short-term threat.

For now, the crypto industry is taking Google’s breakthrough in stride, with developers confident they can stay a step ahead of quantum risks.

Gains Momentum 🇺🇸₿:

Momentum is building for a U.S. strategic bitcoin reserve, an idea championed by President-elect Donald Trump. With bitcoin recently crossing $100,000, the possibility of the government stockpiling the cryptocurrency has stirred debate among policymakers and crypto insiders alike.

Here’s the current pitch:

• The government would acquire bitcoin as a long-term reserve, similar to its gold holdings, with no plans to sell.

• Proponents, including Senator Cynthia Lummis, argue bitcoin could hedge against inflation, reduce national debt, and solidify U.S. leadership in financial innovation.

• Trump promises the government will “never sell” its bitcoin holdings, emphasizing the need to hold seized crypto rather than auctioning it off.

Where things stand now:

• The U.S. government holds 198,000 bitcoin (~$20 billion), making it the largest government bitcoin holder globally.

• Any shift to use forfeited crypto for a reserve would require new legislation, and questions remain about who would custody the assets.

Big players are on board:

• MicroStrategy’s Michael Saylor says the U.S. should sell its gold and buy bitcoin.

• Coinbase and other crypto firms have engaged with Trump’s team, signaling industry support.

The hurdles:

• Custody issues: Proposals include a decentralized network of secure storage facilities or third-party platforms like Coinbase, but concerns about hacking and operational risks loom large.

• Policy shifts: Halting the sale of forfeited bitcoin would require executive orders or congressional action.

Proponents see this as a once-in-a-generation move, likening it to the Louisiana Purchase—a bold step to secure America’s financial future. But for now, the concept of a strategic bitcoin reserve remains on the drawing board, with plenty of questions left unanswered.

It’s Heating Up ☀️:

Starting January 1, tariffs on Chinese-made solar wafers and polysilicon will jump to 50%, while duties on tungsten products will rise to 25%, as the U.S. aims to shield its clean energy sector.

• These tariff hikes come amid escalating trade tensions, with China dominating global production of critical materials like tungsten, a metal vital for industrial and military applications.

• China strikes back: In response to tightened U.S. restrictions on semiconductor technology, Beijing has banned exports of critical minerals like gallium, germanium, and graphite, leaving the U.S. scrambling to secure alternative sources.

The bigger picture:

• The U.S. is doubling down on domestic clean energy investments, aiming to reduce reliance on Chinese imports while shoring up supply chain resilience.

• Tungsten spotlight: As the U.S. relies entirely on imports for tungsten, analysts warn it could be the next pressure point in China’s retaliatory playbook.

More from China 🇨🇳:

Nvidia is going full throttle in China, adding 200 new hires in Beijing this year to boost its AI-driven car research , according to Bloomberg News. The new staff will enhance the company’s efforts in autonomous driving technologies, underscoring Nvidia’s push to dominate the self-driving car market.

• Why China? Despite U.S.-China trade tensions, Nvidia is betting big on the world’s largest auto market, where demand for advanced AI solutions in cars is surging.

• AI meets autonomy: The expanded team will focus on leveraging Nvidia’s cutting-edge AI chips to drive innovation in self-driving tech.

TL;DR 💡: Nvidia’s hiring spree in China signals its commitment to advancing autonomous driving technologies in a market hungry for AI-powered vehicles.

$400B Club:

Tesla’s Elon Musk has hit a jaw-dropping $400 billion net worth, Bloomberg reports. Let’s put that into perspective:

• It’s Iran’s entire GDP.

• You’d need to stack 400 million $1 bills—enough to circle the Earth nearly 1.6 times.

• If you save $1 million a year, it’d only take you 400,000 years to catch up.

Musk’s wealth isn’t just out of this world—it’s off the charts. 💸🌍

🧩 Movers:

• Spotlight ✅ / At the Bottom ❌

  • ✅ Google (GOOG): ⬆️ +5.46% — Led by its AI model Gemini 2.0 launch and boosted by rising interest in Google Cloud as a key AI vendor.

  • ✅ Tesla (TSLA): ⬆️ +5.94% — Continued its momentum, contributing to the Nasdaq’s record day.

  • ✅ Broadcom (AVGO): ⬆️ +6.63% — Soared on reports of collaboration with Apple on AI server chips.

  • ✅ Amazon (AMZN): ⬆️ +2.32% — Benefited from renewed optimism in cloud spending.

  • ✅ Nvidia (NVDA): ⬆️ +3.14% — Gains linked to AI chip demand, where it holds over 70% market share.

  • ❌ Apple (AAPL): ⬇️ -0.52% — Slipped despite AI chip collaboration with Broadcom.

  • ❌ Albertsons (ACI): ⬇️ -1.51% — Declined after its merger with Kroger was officially terminated.

  • ❌ Cigna (CI): ⬇️ -5.57% — Dropped on legislative pressure targeting pharmacy-benefit managers (PBMs).

  • ❌ CVS (CVS): ⬇️ -6.15% — Hit hard by the same PBM legislation.

  • ❌ UnitedHealth Group (UNH): ⬇️ -5.60% — Affected by congressional action against PBMs.

Commodities Check: ✔️

• Crude Oil: ⬆️ +2.5% to $70.27/barrel — Tight U.S. crude stockpiles supported prices.

• Gold: ⬆️ +1.3% to $2,752.70/oz — A safe haven as inflation looms.

• Silver: ⬆️ +0.2% to $32.80/oz — Boosted by steady industrial demand.

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.