Hey there weekday warrior,
J-Poww and the Fed pumped the brakes on rate cuts, and the market reacted exactly how you’d expect.
Enjoy the next 4 minutes and 38 seconds of blue-chip news and commentary.
Keep on snapping necks and cashing checks,
+ US stocks “tumbled to one of their worst days of the year after the Federal Reserve hinted Wednesday it may deliver fewer shots of adrenaline for the U.S. economy in 2025 than earlier thought.” (Yahoo! Finance)
+ The 10-year yield “jumped on Wednesday after the Federal Reserve announced its latest interest rate cut, but signaled fewer could be on the horizon.” (CNBC)
+ Oil “settled higher on Wednesday after U.S. crude inventories fell and the U.S. Federal Reserve cut interest rates as expected, but gains were capped as the Fed signaled it would slow the pace of cuts.” (Reuters)
+ Bitcoin “and the wider crypto market sold off as the Fed announced a 25 basis point rate cut to its benchmark policy rate and signaled that fewer rate cuts than initially planned could take place in 2025.” (Cointelegraph)
+ The three most talked about stocks on WallStreetBets in the past 24 hours were: 1) Tesla -8.2% 2) Nvidia -1.1% 3) Micron Technology -4.3% // -16.1% after hours
The market moves you need to know about…
+ Birkenstock shares climbed 1.9% after reporting a top and bottom line beat, with revenues rising 22% in Q4. Which is impressive, considering how rarely Birkenstock wearers seem to replace their dirty old pairs. The German shoemakers forecast conservative growth in the next fiscal year but did point out that they expect profits to improve with new production facilities and the expansion of their closed-toe clogs. Rex Ryan big mad about that trend.
– Despite an earnings beat, Micron shares fell 16.1% after hours after forecasting a piss-poor earnings outlook for the current quarter. CEO Sanjay Mehrotra anticipates growth in the next fiscal year due to increased AI demand for RAM, but the semiconductor makers have seen softening in the auto and industrial markets. Time to grind, Sanjay.
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The Not Plot
Source: Giphy
“I’ll f*ckin’ do it again…” - Jerome Powell
The Fed has a fever and the only prescription is more rate cuts. The Central Bank slashed its overnight borrowing rate to between 4.25% and 4.5% yesterday. For those of you keeping score at home, that’s the third consecutive cut for J-Poww and the puppet masters controlling our financial fate.
Most of the smart money expected the move. Although, for the second meeting in a row, one member dissented. Prior to November’s meeting, that hadn’t happened since 2005…
So where do we go from here?
The Fed wants to pump the brakes.
J-Poww said, “We moved pretty quickly to get to here, and I think going forward obviously we’re moving slower.”
Per the “dot plot,” the broader FOMC echoes Jay’s sentiment. They expect just two cuts in 2025. That’s a big f*cking deal considering at its most recent meeting the Fed said it was expecting to make four cuts next year…
Markets reacted accordingly. The Nasdaq fell 3.5%.
It makes sense…
After dropping significantly on the front nine of 2024, inflation has remained more stubborn than a Pentagon official when questioned about drones in NJ. Econ 101 would tell us that means the Fed should hold rates steady… or even hike *throws up in mouth a little bit*.
Of course, the Fed argues that it doesn’t want to get caught with its pants down and risk slowing the economy too much.
Jay said, “We think the economy is in [a] really good place. We think policy is in a really good place.”
The Dow Jones Industrial Average fell for the 10th day in a row. That’s the longest streak since 1974… and a friendly reminder of how useless a 30-stock index is.
On Wednesday, the Dow got a little help from its friends at the Fed. J-Poww and the Central Bank slashed the number of rate cuts they expect next year, sending markets plummeting.
+ We’ve officially strayed too far from God…
The TikTok saga is coming down to the wire. The Supreme Court announced that it will hear oral (giggity) arguments on the disputed law requiring Chinese-owned ByteDance to divest its interest in TikTok or face banishment. The proceedings will launch on January 10, only 9 days before the app will face delisting from app stores.
ByteDance plans to come out swinging, claiming that small businesses marketing on TikTok could lose more than $1B in revenue within a month of the ban taking effect. Legislators are pushing to get ‘er done before #47 makes Mar-a-Lago the unofficial White House again. Cannot wait for ByteDance’s lawyers to explain to 76-year-old Justice Clarence Thomas what a Grimace Shake is.
+ “I’ll [NOT] be home for Christmas…” - the stranded ISS astronauts
NASA astronauts Butch Wilmore and Suni Williams got some brutal news: they’ll be stuck in the International Space Station for even longer. The two were originally meant to spend only a week at the ISS until their ride home (a Boeing (-0.2%) spacecraft) ran into technical problems back in June.
SpaceX went all “hold my beer” and scheduled a trip to pick up Wilmore and Williams. But now that’s been delayed until late March of ‘25. Quick math: the astronauts will have spent 9 months in space at that point. And Mrs. Wilmore is definitely still firing off passive-aggressive texts like “Let me guess, working late again?”
+ Phone s*x hotlines down horrendous…
ChatGPT has announced its new toll-free line to chat with AI. Just dial up 1-800-CHATGPT (1-800-242-8478) and you can pretend you have a smart friend for up to 15 minutes per month. Users can also message the bot via WhatsApp, which doesn’t really feel all that different from just using the website, does it?
To Elon’s dismay, OpenAI has gotten far more aggressive with their marketing after bringing on Chief Marketing Officer Kate Rouch of Coinbase fame. The team rolled out plans for a 12-day spree of new feature releases, including dropping their video-generation tool Sora.
Go on, you know you want to call it.
+ This airline is offering ‘budget-savvy’ travelers an ‘all you can fly’ pass for just $299: Here’s what to know. I’d rather take a Greyhound than fly Frontier…
🔥 Harvard researchers: The people who are happiest with their careers share this mindset. Spoiler: they like the taste of drugs and alcohol.
FYI, TWC might be compensated if you click on the links above. So, what are you waiting for? Start clicking.
⏪ Yesterday, General Mills dropped earnings before the bell. And Micron and Lennar reported after the close. Plus, we got the FOMC rate decision and heard from J-Poww.
⏩ Today we’re keeping an eye on…
+ Accenture, Cintas, and Darden Restaurants drop earnings in the morning
+ Nike and FedEx report after the bell
Yesterday, I asked, “You know EVERYTHING that will happen in the financial markets (stocks, crypto, bonds, etc.) for the next 3 years BUT you lose absolutely everything you have immediately. Do you take the deal?”
Yes eked out a win with 51.9% of the vote.
Here’s what some of you had to say (and my thoughts in italics)…
Yes: “Mom will understand the 3 year hiatus after I gift her a Lambo with doors that go like this. Losing the wife and kids for 3 years isn't even a punishment.”
No: “Too much effort. I'm an inside dog these days..."
Yes: “A guy once told me, don't let yourself get attached to anything you are not willing to walk out on in 30 seconds flat..."
No: “my adhd didn’t let me actually read and process the rules, so no was the easier answer"
Yes: "In 3 years I will have Pelosi $$”
Yes: “Brotha it would take me two weeks to get to the amount of money I have rn.”
And here’s today’s question…
An age-old question…
Do you waste PTO on the days between Christmas and New Year's? Or do you just move your mouse around and "work" from home?
Oh, and one more thing…
What did you think about today's newsletter?
Does this look like the face of a guy you should take financial advice from?
No, it’s the face of an individual who is financially irresponsible/dumb enough to be talked into spending money on a family photo shoot that he could have just done with his iPhone. So, act accordingly...
This is not financial advice. Nothing in this newsletter is an investment recommendation. All content is created for entertainment, educational, or informational purposes only. Do your own research, or do yourself a favor and hire a professional.