Archive
Hot Tips
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January 16, 2025
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Budget Deficit Jumps in Q4,
to $710 billion, $200 billion more than forecast. Rising interest payments and falling tax revenues are to blame. $50 trillion, here we come. Bonds hated the news, with the (TLT) breaking $85. Sell all bond rallies.
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EIA Expects Weak Oil Prices for All of 2025.
Many analysts expect an oversupplied oil market this year, after demand growth slowed sharply in 2024 in the top consuming nations: the U.S. and China. The EIA said it expects Brent crude oil prices to fall 8% to average $74 a barrel in 2025, then fall further to $66 a barrel in 2026.
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JP Morgan to Step Up Share Buybacks,
now that the latest capital requirement has been fully met. JPMorgan Chase executives said the bank would increase share buybacks so that a mounting pile of tens of billions of dollars in excess cash doesn’t grow further. Yet another reason to buy (JPM) on dips.
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Morgan Stanley Doubles Profits.
Equities were the big winner, with revenue jumping 51% in the quarter and reaching an all-time high for the full year. In the wealth business, net new assets fell just shy of estimates even as revenue topped expectations.
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Weekly Jobless Claims rise to 217,000,
up 14,000 as the spike of last week’s report fades. We’re still operating at the high end of the recent range.
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January 15, 2025
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JP Morgan Announces Record Profits,
boosted by volatility tied to the US elections in November. Trading revenue at the firm rose 21% from a year earlier, jumping to $7.05 billion. Fixed income was the star, with revenue beating analysts’ estimates, while equities-trading revenue fell short. Buy (JPM) on dips.
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Goldman Sachs Beats.
The firm’s fourth-quarter profits more than doubled to $4.1 billion, buoyed by strength in its investment bank, expansion of its asset management business, and a surprise $472 million gain from a balance sheet bet. Goldman ended 2024 as the best-performing stock among major US banks with a 48% advance. The bank is positioning itself for a long-awaited resurgence in deals after ditching major parts of a consumer foray.
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SEC Sues Elon Musk,
alleging the billionaire violated securities law by acquiring Twitter shares at “artificially low prices.” In his purchases, Musk underpaid for Twitter shares by at least $150 million, the SEC says. Musk bought Twitter in 2022 for about $44 billion, later changing the name to X. Expect this case to get lost behind the radiator next week.
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Fed Minutes are Turning Hawkish,
making an interest rate cut this month unlikely. Inflation is stubbornly above target, the economy is growing at about a 3% pace and the labor market is holding strong. Put it all together and it sounds like a perfect recipe for the Federal Reserve to raise interest rates or at least to stay put.
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Consumer Price Index Cools at 0.2%,
or 3.2% YOY, the first drop in six months. Economists see the core gauge as a better indicator of the underlying inflation trend than the overall CPI which includes often-volatile food and energy costs. The headline measure rose 0.4% from the prior month, with over 40% of the advance due to energy.
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January 14, 2025
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Tame PPI Boosts Stocks.
Data from the Labor Department showed the Producer Price Index rose 3.3% on an annual basis in December 2024, compared with the 3.4% rise expected by economists polled by Reuters. On a monthly basis, the index rose 0.2%.
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Biden Tanks Chip Stocks with New AI Rules,
which will almost certainly get undone in a week. On Monday, the Commerce Department outlined new rules that impose caps on how many advanced artificial intelligence chips can be exported to certain countries, along with additional licensing requirements for AI technology. The move prompted a low opening for stocks from which it quickly recovered.
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Amazon is Getting Ready for Another Run.
Strong earnings and continuing excitement about artificial intelligence will help Amazon stock move back into the green. The e-commerce and cloud company to beat estimates when it reports its fourth-quarter results—analysts are expecting a profit of $1.48 a share on sales of $187.3 billion, according to data from FactSet. Buy (AMZN) on dips.
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China in Talks to Sell TikTok to Elon Musk,
to avoid a court-ordered shut down in the US. TikTok's U.S. operations could either be sold through a competitive process or an arrangement by the government, the report said, suggesting that the future of the app is no longer solely in ByteDance's control.
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$4 Trillion in Asset Management Disrupted by Los Angeles Fires,
with some relocating office space and supporting staff members who have lost their homes. The LA area is home to large industry players like Capital Group, TCW Group and hedge funds Oaktree Capital and Ares Management.
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January 13, 2025
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Los Angeles Fires to Cost $150 Billion,
with only $30 billion covered by insurance. Inflation will rise as the cost of construction labor and materials soar. Tradesmen around the country are packing their trucks and heading west to snare work at double the normal rate. There is no trade here as the new home builder are not involved, who are set up to only build mass-produced track homes. Yet another black swan for 2025. Watch this video on YouTube.
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Edison International Says Fires Not its Fault,
the parent of Southern California Edison, the local utility for Los Angeles. But the market shaved 29% or $9 billion on its market cap anyway. There may be a BUY setting up here for a high yield 5.10% dividend and 16 multiple. Buy (EIX). The southern California economy is about to boom.
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Bonds Hit 14-Month Lows at a 4.80% Yield,
as fixed-income dumping continues across the board. “Higher Rates for longer” don’t fit in here anywhere. But there may be a BUY setting up for (TLT) at 5.0%.
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Cleveland Cliffs Ramps up its Bid for US Steel,
bringing in Nucor as a partner. Cleveland-Cliffs would purchase U.S. Steel in an all-cash deal, with an offer in the high $30s per share. It would then sell U.S. Steel's Big River Steel subsidiary to Nucor.
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The Trump Bump is Gone,
stock markets giving up all their post-election gains. Technology was especially hard hit, with lead stock NVIDIA down 15%. It seems that people finally examined the implications of what Trump was proposing for the stock market. Tax deferred selling of the enormous profits run up under the Biden administration are a big factor.
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January 7, 2025
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NVIDIA Hits New All-Time High,
the largest position held by most Mad Hedge followers, surpassing Apple with a nearly $4 trillion market cap. At the CES conference yesterday in Las Vegas, CEO Jenson Wang indicated that demand for his new Blackwell chips is far greater than expected.
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Zukerberg Caves,
scrapping fact checking on Facebook to compete with Elon Musk’s X. Truth and accuracy is proving too expressive in this new world. Censorship will end. The Nazi’s are back! Deregulation is in.
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JOLTS Soars,
coming in at 8.0 Million versus an expected 7.7 million, indicating a much hotter than expected economy. You can kiss that next interest rate cut goodbye.
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US Online Sales Rise by 9%
over the holidays, with shoppers mainly using their smartphones to buy products ranging from TVs to LEGO sets. Holiday spending from Nov. 1 through Dec. 31 rose 8.7% to about $241.4 billion online in 2023, online spending during the same period grew 4.9%.
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Services PMI Comes in Hot,
at 54.1. Notice all the data is continuing string. The next administration is certainly inheriting a great economy.
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