Trump plans to keep Powell = near-term positive. Nov CPI released on Thu. Syria toppling over weekend barely moves Bitcoin (proxy for risk-assets). Array ( [cookie] => a9ba7f-5bdbe7-5f4a75-d771ae-e7c94e [current_usage] => 1 [max_usage] => 2 [current_usage_crypto] => 1 [max_usage_crypto] => 2 [lock] => [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 47090 [reason] => Usage under limits [method] => ) 1 and can accesss 1

VIDEO: There were several notable headlines over the weekend, including the toppling of Syria and President Trump interview on NBC’s Meet the Press

Please click below to view our Macro Minute (duration: 3:49).

We are now in the final 3 weeks of 2024 and we continue to expect equities to finish the year strong with the S&P 500 reaching 6,300.

• Over the past week, cyclicals rallied led by retailers and apparel (+14%) and MAG7/FAANGs. And Bitconi surged past $100,000. In our view, this is broadly consistent with a market “risk-on” into year-end. And we would be buying dips.
• Over the weekend, the most notable event was the toppling of Syria’s leader Bashar al-Assad, who fled to Moscow. President Biden has pledged to aid Syria, while Presidet-elect Trump weighed in, suggesting the US “stay out of the fight.” Obviously, two conflicting views and this could leave markets a tad puzzled.
• Bitcoin is probably the proxy to watch (given BTC trades 24/7) and the reaction has been muted. Bitcoin has traded in the same $2,000 range all weekend, around $99,000. So to us, the toppling of Syria is not seen as having dramatic impacts on our year-end outlook.
• President-election Trump was interviewed on NBC’s “Meet the Press” by Kristen Welker. And one of the notable headlines is that he won’t “try to remove Fed chief Jerome Powell.” This is counter to the generally held view that the incoming President might try to replace Powell, or even attempt to push Fed Chair to retire early. To us, this is good news.
• As for the macro data this week, there is a few notables:
  – 12/9 Mon 11:00 AM ET: Nov NY Fed 1yr Inf Exp
  – 12/10 Tue 6:00 AM ET: Nov Small Business Optimism Survey    94e
  – 12/10 Tue 8:30 AM ET: 3Q F Nonfarm Productivity    2.2%e
  – 12/10 Tue 8:30 AM ET: 3Q F Unit Labor Costs    1.5%e
  – 12/11 Wed: 2025 Year Ahead Outlook Webinar
  – 12/11 Wed 8:30 AM ET: Nov Core CPI MoM    0.27%e
  – 12/12 Thu 8:30 AM ET: Nov Core PPI MoM    0.22%e
• Of these, the two hlighlights are the 2025 Year-ahead Webinar (Wed) and the Nov CPI (Thu).
• The street is looking for Nov Core CPI of +0.27% MoM, and our view is that this report will be largely in line around that level. More important, the odds of a Dec cut remain +85%, rising to that level from 65% after Friday’s Nov jobs report was largely in line.
• Recall, we consider it more bullish for the Fed to do fewer cuts in 2025. This is because this lengthens the cutting cycle. The fact that used car prices are not falling as quickly as previously (Manheim) suggests that CPI has fewer near-term tailwinds to fall sharply. But this does not mean the Fed has to turn hawkish.
• And finally, we continue to see multiple factors supporting a rally into year-end. These factors are:
  – Seasonally Dec strong – 83% probability
  – Interest rates declined pre-election levels
  – Sentiment cautious = contrarian positive
  – Fed “put” + Trump “put” = “buy any dip”
  – Near-term uncertainty = “buy any dip”
• As for the seasonality argument. Since 1950, here are probabilities of an “up” December:
  – since 1950 (n=74)
  – when S&P 500 up >10% first half (n=23)
  – December higher 83% of time, median +2.9%
  – if ALSO election year, 100% of time, median +3.4%
  – implies S&P 500 6,250, close enough to 6,300

Bottom line: Stay on target into year-end

We see stocks rallying into year-end, with the possibility of a “zone of hesitation” near-term. But we would urge investors to buy this dip. That said, we see more upside for other groups. This holds whether looking at 2016, or whether thinking of a dovish Fed. The drivers are:

• de-regulation
• drop in cost of capital for businesses
• general “animal spirits” given Republican White House and Senate

This favors the following groups:

• Small-caps: IWM -0.53%  IJR 0.34%
• Cyclicals: XLF 0.25%  KRE 1.55%  XLI -0.12%
• Bitcoin: BTC MSTR -3.73%  SMLR -5.24%

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44 SMID Granny Shot Ideas: We performed our quarterly rebalance on 11/25. Full stock list here -> Click here

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Key incoming data December:

• 12/2 9:45 AM ET: Nov F S&P Global Manufacturing PMI Tame
• 12/2 10:00 AM ET: Nov ISM Manufacturing PMI Tame
• 12/3 10:00 AM ET: Oct JOLTS Job Openings Tame
• 12/4 9:45 AM ET: Nov F S&P Global Services PMI Tame
• 12/4 10:00 AM ET: Nov ISM Services PMI Tame
• 12/4 10:00 AM ET: Oct F Durable Goods Orders Tame
• 12/4 2:00 PM ET:  Fed Releases Beige Book Dovish
• 12/5 8:30 AM ET: Oct Trade Balance Tame
• 12/6 8:30 AM ET: Nov Non-Farm Payrolls Tame
• 12/6 9:00 AM ET: Nov F Manheim Used vehicle index Mixed
• 12/6 10:00 AM ET: Dec P U. Mich. Sentiment and Inflation Expectation Tame
• 12/9 11:00 AM ET: Nov NY Fed 1yr Inf Exp
• 12/10 6:00 AM ET: Nov Small Business Optimism Survey
• 12/10 8:30 AM ET: 3Q F Non-Farm Productivity
• 12/10 8:30 AM ET: 3Q F Unit Labor Costs
• 12/11 8:30 AM ET: Nov CPI
• 12/12 8:30 AM ET: Nov PPI
• 12/16 8:30 AM ET: Dec Empire Manufacturing Survey
• 12/17 8:30 AM ET: Nov Retail Sales Data
• 12/17 9:00 AM ET: Dec P Manheim Used vehicle index
• 12/17 10:00 AM ET: Dec NAHB Housing Market Index
• 12/18 2:00 PM ET: Dec FOMC Decision
• 12/19 8:30 AM ET: 3Q T 2024 GDP
• 12/19 8:30 AM ET: Dec Philly Fed Business Outlook
• 12/19 10:00 AM ET: Nov Existing Home Sales
• 12/19 4:00 PM ET: Oct Net TIC Flows
• 12/20 8:30 AM ET: Nov PCE Deflator
• 12/20 10:00 AM ET: Dec F U. Mich. Sentiment and Inflation Expectation
• 12/23 8:30 AM ET: Nov Chicago Fed Nat Activity Index
• 12/23 10:00 AM ET: Dec Conference Board Consumer Confidence
• 12/24 10:00 AM ET: Nov New Home Sales
• 12/24 10:00 AM ET: Nov P Durable Goods Orders
• 12/30 10:30 AM ET: Dec Dallas Fed Manuf. Activity Survey
• 12/31 9:00 AM ET: Oct S&P CoreLogic CS home price

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: