Wesley Nolte @Wesl3y: "𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 (𝟮𝟮 𝗗𝗲𝗰 𝟮𝟬𝟮𝟱) The..."

United Kingdom

𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 (𝟮𝟮 𝗗𝗲𝗰 𝟮𝟬𝟮𝟱) The past ten days delivered 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿'𝘀 𝗰𝗹𝗮𝘀𝘀𝗶𝗰 𝘄𝗵𝗶𝗽𝗹𝗮𝘀𝗵. The $SPX500 hit record highs on 11 Dec, sold off hard through the week, then recovered to close 19 Dec essentially flat for the week. The culprit? The Fed cut rates as expected but signalled 𝗷𝘂𝘀𝘁 𝗼𝗻𝗲 𝗺𝗼𝗿𝗲 𝗰𝘂𝘁 𝗶𝗻 𝟮𝟬𝟮𝟲 (I suspect we’ll get 2-3), disappointing those pricing in more. $ORCL (Oracle Corporation) initially dropped mid-month on AI spending concerns, pulling AI-related tech with it. However the stock price jumped when it announced a 15% stake in the TikTok US joint venture. 𝗟𝗮𝗿𝗿𝘆’𝘀 𝗹𝗼𝘃𝗶𝗻𝗴 𝗺𝗲𝗱𝗶𝗮 all of a sudden. 𝙒𝙝𝙖𝙩 𝙝𝙚𝙡𝙥𝙚𝙙 𝙩𝙝𝙚 𝙧𝙚𝙘𝙤𝙫𝙚𝙧𝙮? 𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗱𝗮𝘁𝗮 𝗰𝗮𝗺𝗲 𝗶𝗻 𝘀𝗼𝗳𝘁𝗲𝗿 𝘁𝗵𝗮𝗻 𝗲𝘅𝗽𝗲𝗰𝘁𝗲𝗱 across the board. US CPI hit 2.7% YoY (vs 3.1% expected), UK inflation fell to 2.5%, and the Eurozone printed 2.2%. Markets rallied on the news, with tech bouncing back sharply. The soft prints gave some breathing room even as US unemployment climbed to 4.6% (highest since September 2021). All-in-all, macro is supporting the case for more rate cuts. $META (Meta Platforms Inc) has had a 𝘀𝗼𝗹𝗶𝗱 𝗿𝗲𝗯𝗼𝘂𝗻𝗱 during the past month or so. The stock shook off earlier AI spending concerns and benefited from the broader tech recovery. $LULU (Lululemon Athletica Inc) 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲𝘀 𝗶𝘁𝘀 𝗯𝗼𝘂𝗻𝗰𝗲 from the December 17 CEO resignation announcement, which sparked a 6.5%+ rally together with Elliott Investment Management's $1B+ stake being revealed. The stock's still down 45-52% for the year, but the activist pressure, growth in non-US markets, and leadership change have brought buyers back. $FCX (Freeport-McMoRan Inc) continued its copper-driven climb, hitting a 52-week high. 𝗖𝗼𝗽𝗽𝗲𝗿 𝗽𝗿𝗶𝗰𝗲𝘀 𝗮𝗿𝗲 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵𝗶𝗻𝗴 𝗿𝗲𝗰𝗼𝗿𝗱 𝘁𝗲𝗿𝗿𝗶𝘁𝗼𝗿𝘆, up 34% YoY. The rally's been driven by supply constraints, China stimulus, and data centre demand. The weaker dollar has also played a significant role. I think FCX could continue marching towards $60. 𝙒𝙝𝙖𝙩'𝙨 𝙣𝙚𝙭𝙩? Most expect 𝗮 𝗾𝘂𝗶𝗲𝘁, 𝗹𝗼𝘄-𝘃𝗼𝗹𝗮𝘁𝗶𝗹𝗶𝘁𝘆 𝗺𝗮𝗿𝗸𝗲𝘁 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗵𝗼𝗹𝗶𝗱𝗮𝘆𝘀. The Santa Claus rally window is historically positive, though the S&P's failure to break its October high is worth watching. Small caps continue to outperform, with $IWM (Ishares Russell 2000 ETF) hitting record highs post-Fed cut, and the rotation from growth to value seems to have stalled for now. I'm holding my positions and staying patient. Mega-cap tech feels stretched at these valuations, but the broader market looks more reasonable. The data's mixed enough that there's 𝗻𝗼 𝗰𝗹𝗲𝗮𝗿 𝗿𝗲𝗮𝘀𝗼𝗻 𝘁𝗼 𝗺𝗮𝗸𝗲 𝗯𝗶𝗴 𝗺𝗼𝘃𝗲𝘀 before year-end.

Not investment advice. The author may have financial interests in the mentioned instruments.