Weekly Wrap-Up #2: Market Insights and Highlights
Highlights of the Week: December 14–20, 2024
Hi, Investor 👋
I’m Jimmy, and I’m thrilled to bring you another edition of our Weekly Wrap-Up! Each week, we provide a concise summary of the top market news, along with our insights and perspectives to help you stay informed and ahead of the curve. Let’s dive into this week’s highlights.
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Phrase of the week:
"Your brand is what other people say about you when you're not in the room."
– Jeff Bezos
🇺🇸 | United States
Markets anticipated three rate cuts, but Powell hints at “something less”
U.S. inflation slowed to 2.4% in November, below market expectations and close to the Fed's 2% target. The consumer price index rose just 0.1% this month, with lower energy and housing costs contributing to the slowdown.
Federal Reserve’s Chairman Jerome Powell highlighted the progress, saying inflation was "closer" to the Fed's target. However, he warned that interest rate cuts next year may be smaller due to concerns about persistently high inflation.
Powell used a metaphor:
"When the road is uncertain, you slow down. It's like driving on a foggy night or entering a dark room full of furniture."
While the economic slowdown is a positive sign, the Fed remains cautious and emphasizes the need to carefully monitor economic trends. Analysts point out that Powell’s vigilance reflects its commitment to ensuring long-term price stability.
United States Click-Worthy Headlines:
♟️ | Trump’s wake-up call: Republicans are willing to defy him
🗽 | How a Government Shutdown Could Affect Americans
🏠 | Existing home sales increase to 8-month high
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🌍 | Rest of the World
Political chaos in France worsens economic outlook
France’s political turmoil is leading to a sharp decline in the country’s economic prospects, according to analysts. Ongoing protests, government instability and growing tensions between political factions have disrupted key sectors such as energy and transportation and raised concerns about growth and stability.
Economists warn that continued unrest could lead to a drop in gross domestic product and hurt investor confidence. The worsening situation has sparked discussions about possible budget reforms to address the budget deficit, but political deadlock has hampered progress. The lack of a clear solution has increased uncertainty for businesses and households.
Amid the crisis, the French government is under increasing pressure to stabilize the political landscape while ensuring economic resilience. Observers note that without decisive action, France risks long-term damage to its economic foundation, as both domestic and international stakeholders grow increasingly wary of the country’s direction.
Rest of the World Click-Worthy Headlines:
🪖 | Israel strikes Houthi targets in Yemen after missile attack
💰 | Japan government approves $92 bn extra budget
💵 | Argentina Takes Steps to Speed Up Milei’s Dollarization Strategy
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📈 | Corporate News
Microsoft acquires twice as many Nvidia AI Chips as rivals
In 2024, Microsoft purchased approximately 485,000 of Nvidia's Hopper AI chips, doubling the acquisitions of its closest competitors. This substantial investment underscores Microsoft's commitment to advancing its AI infrastructure, particularly through its partnership with OpenAI. The procurement reflects the escalating demand for AI capabilities across the tech industry.
SoftBank's $100 billion Investment Plan
SoftBank has announced a $100 billion investment initiative aimed at fostering technological advancements in artificial intelligence, semiconductor development, and data centers. CEO Masayoshi Son emphasized the importance of U.S. confidence in future technological growth, aligning the investment with efforts to strengthen ties with the incoming U.S. administration. The plan reflects SoftBank's strategic focus on AI and related technologies.
Nike warns its turnaround will be a slog, after results beat expectations
Nike reported its fiscal Q2 2025 results, surpassing Wall Street expectations despite an 8% year-over-year sales decline. Under new CEO Elliott Hill, who took the helm in September, the company posted $12.35 billion in revenue, exceeding estimates but falling short of last year's $13.39 billion. Net income was $1.16 billion, with earnings per share of $0.78, above projections but down 24% y/y. Hill outlined plans to reposition Nike, focusing on product portfolio adjustments and re-centering the brand around sports, amid challenges like declining digital sales and inventory pressures. Shares rose +8.32% post-market, though still down -29% YTD.
Rest of the World Click-Worthy Headlines:
🦇 | BATMMAAN begins: These may be the dominant stocks for next year
🏭 | U.S. Steel Lowers Fourth-Quarter Guidance Amid Volume and Price Pressures
📦 | FedEx Is Breaking Up. Wall Street Loves the Idea.
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Editor's Choice: Weekly Recommendation
As we close this week’s edition, I encourage you to watch Howard Marks: The Most Important Thing - Origins and Inspirations. Howard Marks, Co-Chairman of Oaktree Capital Management, is a name every thoughtful investor should know. His famous "Oaktree memos" have earned praise from none other than Warren Buffett, who once said they are the first thing he opens and reads. Marks has a rare ability to blend psychology and finance, offering insights that challenge conventional thinking and inspire better decision-making.
In this video, Marks dives into the importance of understanding market cycles—a critical concept for navigating the highs and lows of investing. Whether you're new to the market or a seasoned pro, his perspective is a valuable reminder of the principles that drive long-term success. Take a moment to watch—it’s time well spent.
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