A surprisingly strong jobs report kicked off the worst market day of 2025 (so far), sending the S&P 500 into negative territory for the year.

December jobs report shattered expectations on Friday with 256,000 new hires—nearly 100,000 more than forecast. A stronger labor market has traders recalculating the Fed’s next move, dialing back hopes for rate cuts. The result? Stocks tumbled, and Treasury yields surged as Wall Street processed the news.

⚡ Closing Bell:

• Dow Jones: ⬇️ -1.6% to 41,938.5

• S&P 500: ⬇️ erased its 2025 gains, falling 1.5% to 5,827.

• Nasdaq: ⬇️ slid 1.6% to 19,161.6, weighed down by tech.

• Russell 2000?⬇️ It stumbled the hardest, down 2.2%.

The Sector Shuffle:

• ✅ Energy? The day’s lone winner, riding a 3.6% jump in oil prices.

• ❌ Real estate and financials were the day’s biggest losers, down over 2%.

• Tech stocks struggled as rising yields dampened enthusiasm for growth plays.

Economic Takeaways:

• Nonfarm Payrolls: Surged 256,000, outpacing expectations of 165,000.

• Inflation Expectations: Consumers’ five-year inflation outlook rose to 3.3%, its largest one-month jump in four years.

• Treasury Yields:

  • 10-year: ⬆️ +8.4 bps to 4.77%

  • 2-year: ⬆️ +12.4 bps to 4.39%

❗ What’s next?
Strong job growth is great news for Main Street—but it’s giving Wall Street a headache. With 30-year Treasury yields briefly hitting 5% and inflation expectations creeping up, all eyes are on this week’s CPI report to see if the Fed’s rate-cut plans hit turbulence.

#TRUTH:
❗❗❗ “Start each day with a task completed.” ~ Admiral William H. McRaven

📅 Earnings Kickoff:

• Wednesday: Results from JPMorgan Chase ($239.78, -1.32%), BlackRock ($952.55, -3.09%), Goldman Sachs ($560.90, -3.47%), and Citigroup ($71.31, -2.55%).

• Thursday: Followed by Bank of America ($45.05, -2.40%) and Morgan Stanley ($123.85, -3.46%).

Also, this week:

All eyes are on this week’s inflation numbers, starting with the consumer price index report on Wednesday. Here’s the lineup:

• Monday: New York Fed’s one-year inflation expectations.

• Tuesday: Producer prices data.

• Thursday: Weekly jobless claims.

Stock Stories:

• ✅ Walgreens Boots Alliance (WBA): ⬆️ +27.4% after smashing Q1 earnings expectations.

• ✅ Constellation Energy (CEG): ⬆️ +25%, buoyed by its $26.6 billion acquisition of Calpine.

• ❌ Constellation Brands (STZ): ⬇️ -17%, after missing Q3 forecasts and cutting guidance.

• ❌ Media Titans (DIS, FOX, WBD): ⬇️ All dropped after shelving plans for the Venu Sports streaming service.

• ✅ Meta (META): ⬆️ Flipped from a 2% loss to a 0.9% gain as rumors swirled about a potential TikTok ban.

• ❌ Constellation Brands (STZ): ⬇️ Tumbled 17.1% after slashing guidance.

• ✅ Delta (DAL): ⬆️ Flew high with an 8.98% jump, thanks to strong quarterly results.

Quick Hits:

① TikTok’s Troubles, Meta’s Gain
TikTok’s future looks shaky after arguments at the Supreme Court hinted at a possible ban. Meta (META $615.01, ⬆️ +0.87%) capitalized, flipping from a 2% loss to a 3% gain before closing in the green. As TikTok hangs in limbo, Meta is soaking up the spotlight as a likely beneficiary.

② Exxon Mobil’s Unrefined Forecast
Exxon (XOM $106.45, ⬇️ -0.37%) isn’t winning any popularity contests after issuing a profit warning tied to weaker refined product prices. Bank of America cut its price target to $122 but maintained a neutral stance. Yet, Wall Street remains optimistic—60% of analysts rate Exxon a “buy” or “overweight,” the highest in a decade. Mark your calendars: Exxon reports earnings on January 31.

③ Tesla’s $420 Target: Coincidence?
Deutsche Bank boosted Tesla’s (TSLA $393.10, ⬇️ -0.02%) price target to $420—Musk’s favorite number. This comes even as they predict slower sales growth (15% versus Tesla’s projected 20%-30%). The optimism stems from Tesla’s ventures into AI-driven robotaxis and robotics, which Deutsche Bank sees as long-term game-changers.

④ Sony’s Smell Experiment
At CES, Sony (SONY $20.36, ⬇️ -2.00%) unveiled its futuristic “Smell-O-Vision” cube concept, designed to immerse players in sights, sounds, and scents. While bold, this move is unlikely to erase Sony’s challenging 2024 performance. For now, gamers won’t be smelling “Gran Turismo” exhaust from the comfort of their couches.

⑤ Data Breach Exposes Candy Crush and Tinder
A breach at Gravy Analytics revealed sensitive location data from millions of users, implicating apps like Candy Crush, Tinder (MTCH $31.52, ⬇️ -3.26%), and Disney Magic Kingdoms. The exploit, which leveraged ad loopholes, highlights ongoing privacy concerns in the largely unregulated location-data industry. Following an FTC ban on Gravy’s data sales, the privacy debate is far from over.

Tesla & China:

Tesla’s updated Model Y, internally codenamed “Juniper,” is set to hit China in March, featuring a refreshed design that incorporates elements from the Cybertruck and last year’s Model 3 revamp. However, the new version comes with a 5% price increase, which may not sit well with those anticipating more affordable options from the EV giant.

While Tesla had previously teased the possibility of a $25,000 EV, those plans were sidelined in favor of incremental updates and a focus on a low-cost robotaxi. The price increase signals a continued emphasis on premium offerings, even as Tesla has relied on discounts and tax-credit eligibility to maintain competitive pricing.

Tesla’s Sales Landscape

• China: Sales grew in 2024, albeit at a slower rate, as local competitors like BYD gained traction.

• US & Europe: Sales dipped, marking Tesla’s first-ever annual decline since going public.

Tesla’s success in China will be critical as it navigates a landscape where local EV players dominate and global demand shifts. And investors are watching closely.

One Year 🎂

January 10 marks the one-year anniversary of the SEC’s approval of the first spot bitcoin ETFs, a milestone that has reshaped the crypto landscape. These funds now manage a staggering $109 billion in assets, representing 6% of bitcoin’s total supply. Remarkably, they even overtook gold ETFs in assets under management as of December 17, 2024.

Highlights from Year One:

• Bitcoin’s Price Surge: When the ETFs launched, bitcoin traded at $46,000. A year later, it has more than doubled, recently crossing the $100,000 threshold.

• Top Performers:

  1. BlackRock iShares Bitcoin Trust (IBIT): $53 billion AUM – the most successful ETF debut in history.

  2. Fidelity Wise Origin Bitcoin Fund (FBTC): $19.6 billion AUM.

  3. Grayscale Bitcoin Trust ETF (GBTC): $19.2 billion AUM.

  4. ARK 21Shares Bitcoin ETF (ARKB): $4.5 billion AUM.

  5. Bitwise Bitcoin ETF (BITB): $4.2 billion AUM.

The SEC’s bitcoin ETF approval paved the way for spot ethereum ETFs in July 2024, which have since amassed $10.1 billion in assets.

What’s Next?

With a crypto-friendly administration incoming, the market is buzzing about potential altcoin ETFs. Applications for solana ETFs are already under review, and Ripple hinted that an XRP ETF might not be far off.

The crypto ETF boom has cemented its role in the financial markets, and the next year could bring even more innovation.

$81:

Oil prices rallied for the third straight session today, with
– Brent crude pushing past $81 per barrel—its highest level in over four months.
– West Texas Intermediate (WTI) wasn’t far behind, climbing over $78 per barrel.
The catalyst? Fresh U.S. sanctions targeting Russian crude exports to major buyers like China and India, sparking fears of tighter global supply.

The new sanctions, which blacklist Russian producers Gazprom Neft and Surgutneftegas along with 183 oil tankers, are aimed at cutting Moscow’s revenue streams amid the ongoing conflict in Ukraine. Analysts expect the restrictions to significantly disrupt Russian oil flows, forcing China and India—the world’s top and third-largest oil importers—to look elsewhere, likely driving up shipping costs and crude prices globally.

What the Experts Are Saying
Goldman Sachs sees upside risks to their $70-$85 Brent forecast, noting that 1.7 million barrels per day (25% of Russia’s exports) were carried by the now-sanctioned tankers. Meanwhile, RBC Capital Markets flagged logistical headaches ahead, with a doubling of sanctioned tankers set to choke crude flows further.

The impact on India could be particularly severe, as many of the sanctioned vessels had been transporting Russian barrels to South Asia. Harry Tchilinguirian of Onyx Capital Group called the latest sanctions “consequential,” while JPMorgan analysts pointed out that Russia may be forced to rely on discounted crude sales or scramble for non-sanctioned ships to keep exports afloat.

A Tighter Market
The sanctions are already sending shockwaves through oil markets. Brent and WTI spreads are in their widest backwardation since late 2024, signaling tight supply as prompt prices surge higher than futures.

Gold Rush:

Gold is holding steady near a one-month high at $2,690 an ounce, as traders look for cover in the face of fresh Federal Reserve rate uncertainties. Last week’s 1.9% rally cemented bullion’s reputation as the ultimate “just-in-case” investment, even as bond yields and the dollar flexed their muscles.

What’s behind?
① Labor Market Resilience: Friday’s job report proved the US labor market isn’t ready to slow down, leading economists to rethink how far the Fed will go with rate cuts.
② Volatility Fears: With stronger-than-expected economic data and Donald Trump preparing for Round Two at the White House, risk-off sentiment is driving investors toward haven assets like gold and the dollar.

Meanwhile, silver and palladium are holding steady, while platinum took a dip. Traders are bracing for more twists in the markets as the rate-cut debate heats up.

Commodities Check: ✔️

Here’s how the commodities ended on January 10, 2025:

• Oil: West Texas Intermediate crude finished down ⬇️ -1.2% at $73.33 per barrel.

• Gold: Continued its upward trend, closing up ⬆️ +0.6% at $2,680.20 per ounce.

• Silver: Edged higher, ending up ⬆️ +0.3% at $30.78 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.