Archive for December, 2024

• Morning News: December 20, 2024
  Eddy Elfenbein, December 20th, 2024 at 7:03 am

  Japan Consumer Prices Rise Faster as Rate Hike Timing Under Scrutiny

  Brazil’s Market Turmoil Sparks Worries Over ‘Fiscal Dominance’

  Trump Warns Europe to Buy More U.S. Oil and Gas or Face Tariffs

  Trump Is Threatening Europe With Tariffs. Is It Ready?

  Who’s in Charge?

  What to Know About the Debt Ceiling as Trump Backs Eliminating It

  Trump-Backed US Funding Plan’s Failure Showcases GOP Fissures

  The Fed Cut Rates. Mortgage Costs Went Up.

  Trump Trade in Stocks Undermined by Inflation Fight

  Swiss Inquiry Castigates Failings of Credit Suisse Oversight, But Pins Most Blame on Bosses

  SPAC Kings Who Delivered 99% Losses Are Raising Billions Again

  Ex-Citadel Trader Northridge Gets $1 Billion From Marshall Wace

  The Cult of the “Cost-Killer” CEO Should End

  Rupert Murdoch’s Appeal to Alter Family Trust Faces Uphill Battle

  Biden Cancels Nearly $4.3 Billion in Public Worker Student Debt

  Nvidia’s Deal to Buy Israel’s Run:ai Wins Unconditional EU Nod

  Britannica Didn’t Just Survive. It’s an A.I. Company Now.

  Novo Nordisk Falls Most on Record After New Weight Drug Disappoints

  Sandoz Boss Warns There’s a Climate Cost of Obesity Wonder Drugs

  It’s a Bird! It’s a Plane! It’s Brazilian Bum Bum Cream!

  Volkswagen Union Says Labor Negotiations Stuck After Four Days of Talks

  Starbucks Workers Say They Will Begin a Strike in 3 Cities on Friday

  When the Pink Slip Comes Via Text and Email

  As Elder Fraud Explodes, Banks Beat Back Duty to Call Cops

  Aflac Keeps Eye on Japan Market as Others Turn Overseas for Growth

  Nike’s Half Measures Need Another Shoe to Drop

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• Morning News: December 19, 2024
  Eddy Elfenbein, December 19th, 2024 at 7:04 am

  EU Leaders Set to Discuss Gas Transit With Zelenskiy in Brussels

  Zelenskiy Urges Unity Between US and Europe to Achieve Peace

  Britain’s Economy Is ‘Bumbling’ Into the New Year

  Lula’s Powerless Aides Let Currency Panic Go Unchecked in Brazil

  Trump, Musk Threaten US Shutdown and Shake Up Republican Party

  Rubio Could Be to Trump What Talleyrand Was to Napoleon

  The Hidden Threat to National Security Is Not Enough Workers

  Americans Abroad Pin Hopes on Trump Promise to End Double Taxation

  Why the Specter of Trump Hangs Over the Fed, Congress and the Markets

  ‘One of the Dumbest Ideas’: Abolishing the FDIC Could Backfire on Trump and His Allies

  Fed Drops a Lump of Coal in Trump Market’s Christmas

  Powell Signals Fed’s Focus Has Returned Firmly to Inflation

  Where Does a ‘Remarkable’ U.S. Economy Go From Here?

  Companies That Spent Billions on M&A Are Now Selling for Peanuts

  Private Credit Looks to Consumers, Infrastructure for Next Stage

  Fed, OCC Use Outdated Criteria to Assess Bank Mergers, Senator Warren Says

  Dealmakers Eye $4 Trillion-Plus M&A Haul in 2025 on Trump Boost

  Government Contractor KBR, Recently Hit by DOGE Fears, Draws Activist Investor

  Activist Investor Palliser Capital Widens Call for Review of Rio Tinto’s Dual-Listing Status

  This Red Midwestern State Is a Global Paragon of Clean Power

  Protecting the World’s Biggest Uninsured Economy From Climate Change

  Tik Tok Offered Last Chance to Argue for US Life

  Thousands of Amazon Workers Go on Strike Thursday

  G.M. Led in China for Years. Here’s How It Ended Up 16th in Sales.

  Publishers Battle for the C-Suite

  MacKenzie Scott Has Given Away Over $19 Billion in the Last 5 Years and Experts Say She’s ‘Changed Entire Fields Like Affordable Housing’

  Starbucks Has a Pumpkin Spice Latte Problem in China

  Everton FC Takeover by Toyota Tycoon Dan Friedkin Gets Approval

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• Morning News: December 18, 2024
  Eddy Elfenbein, December 18th, 2024 at 7:06 am

  Saudi Arabia Taps Aramco Oil Field Brine in Lithium Battery Push

  We’re Burning More Coal Than Ever Thanks to China

  Nigeria Banks on Higher Oil Revenue to Fund Record Budget

  Why Barclays Is One of the Main Targets of UK Climate Activists

  The Economy Is Finally Stable. Is That About to Change?

  Fed Set to Deliver Third-Straight Interest Rate Cut

  The Dow Just Did Something It Hasn’t Done Since Jimmy Carter Was President

  Macro a Must-Have for Hedge Fund Investors Betting on 2025 Market Swings

  The New AI Stock Pickers Are Destined to Disappoint

  US Watchdog Warns Credit Card Issuers Not to Devalue Rewards

  Billionaire Paul Singer’s Succession Plan Is Under a Spotlight

  China’s Billionaires Are Making Money for First Time Since 2020

  Google Is Pushing Quantum Computing Closer to Reality

  Boeing Resumes Production of Airplanes, Including 737

  Nissan’s Top Shareholder Renault Said Open to Honda Talks

  The China Shock Behind the Honda-Nissan Merger Talks

  Foxconn Has Discussed Making Bid for Nissan

  Blocking Nippon-U.S. Steel Would Be One of Biden’s Worst Decisions

  Merck in Pact for Chinese Obesity Drug in Nearly $2 Billion Deal

  A 7-Eleven Heir’s $50 Billion Fight to Keep the Company in the Family

  Bain Capital in Talks to Buy Little Caesars Operator Sizzling Platter

  Walmart Cements Retail Dominance With Best Year Since 1998

  Ulta Is Selling Toys to Hook Kids as Young as Six on Makeup

  Giving Pledge Group, Led by Gates and Buffett, Removes Billionaire Accused of Fraud

  Inside Disney’s Decision to Settle a Trump Defamation Suit

  Disney Pulls Transgender Story Line From New Series

  With Sports Gambling Surging, Federal Regulation Is Discussed

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• CWS Market Review – December 17, 2024
  Eddy Elfenbein, December 17th, 2024 at 3:24 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Growth Stocks Rally

  Growth stocks, apparently, have the holiday spirit. Nearly every day for the past three weeks, growth stocks have outpaced the overall market.

  Of course, you’ll often see growth or value lead the market for a few days, but this recent turn towards growth has been especially pronounced.

  Value is playing the role of the Grinch. The S&P 500 Value Index has closed lower for 13 days in a row. On Tuesday, the Dow closed lower for the ninth day in a row. That’s the index’s longest losing streak since 1978.

  Meanwhile, Apple, Google and Tesla all hit new 52-week highs today.

  

  The message is clear as we head into 2025: investors are perfectly fine with shouldering more risk. Tech stocks have done especially well, and the Nasdaq 100 ETF has been on fire.

  The point I often stress to investors is that growth and value cycles don’t magically fall out of the sky. They often get a nice push from our friends at the Federal Reserve.

  As it turns out, the Fed is meeting this week. In fact, today was the first day of their two-day meeting. The Fed’s policy statement will be out tomorrow afternoon, and I’ll spoil the surprise for you: you can be sure that the Fed will cut interest rates by 0.25%.

  At this meeting, the Fed will also update its economic projections. I’ll caution you that the Fed doesn’t exactly have a stellar record when it comes to forecasting the economy. Not many of us do. Still, it’s important to see how they’re wrong.

  The big question now is what happens in 2025. There’s an emerging consensus that the Fed will pause at its January meeting. Here’s the Fed Funds rate (in blue) being chased by its shadow, the 2-year Treasury yield (in red):

  

  Until now, the Fed has made it clear that it wants to lower interest rates, but now Wall Street thinks they may be getting ahead of things. After all, the last CPI report showed that inflation is being very stubborn, and there are plenty of bright spots in the economy.

  Traders even think there’s a decent chance that the Fed will pause at its March meeting. That’s not the majority view, at least not yet.

  The undercurrents in the stock market are reacting to the outlook for interest rates. When short-term rates are falling, value stocks tend to outperform. When short-term rates are rising, value stocks tend to lag.

  In this instance, rates aren’t even going up. Rather, the recent trend of lower rates is cooling off. This makes sense as the economy appears to be doing well.

  Shortly after President-Elect Trump’s election victory, many “old economy” sectors rallied, but that trend came to a quick halt in December.

  Retail Sales Were Strong Last Month

  Shoppers are in a good mood. This morning, we learned that retail sales increased by 0.7% last month. Wall Street had been expecting a gain of 0.5%. The number for October was revised higher to 0.5%. Over the last year, retail sales are up by 3.8%. This suggests that the economy did well during Q4.

  Economists like to look at “core” retail sales which excludes cars, gasoline, building materials and food services. For November, core retail sales were up by 0.4%. That comes after a 0.1% drop in October.

  Receipts at food services and drinking places, the only services component in the report, fell 0.4% after increasing 0.9% in October. Economists view dining out as a key indicator of household finances.

  Sales at clothing stores decreased 0.2%. Grocery store sales also declined 0.2%. Sales at miscellaneous retailers, which include florists and gift shops, dropped 3.5%, extending the prior month’s decline.

  Sales at auto dealerships increased by 2.6%. Online retail sales grew by 1.8%. Building materials and garden equipment store sales rose 0.4%.

  There are some weak spots in the economy. This morning, the Federal Reserve said that industrial production fell by 0.1% last month. That was the third month in a row that industrial production fell. Wall Street had been expecting an increase of 0.3%.

  The Santa Claus Rally

  We’ve also just started the stock market’s happiest time of year which is the Santa Claus Rally. I’ve crunched all the numbers for the S&P 500 going back to 1957 when the index was expanded to 500 stocks.

  From December 15 to January 6, the S&P 500 has gained an average of 2.81%. That may not sound like a lot, but as far as 67-year averages go, it’s quite large. This means that historically, one-quarter of the S&P 500’s annual gain has come during a three-week period in the holiday season.

  This is what the average year for the S&P 500 looks like:

  

  If we expand our parameters a bit, we see that the S&P 500 has gained an average of 8.24% from October 26 to February 15. That means that nearly three-quarters of the S&P 500’s annual gain has come during a period of less than four months. During the rest of the year, the market hasn’t done much. (Buy the World Series and sell the Super Bowl?)

  To be clear, I would never base an investment decision on these calendar effects. I find it fascinating that the markets do seem to have their biases regarding time of year. The monthly cycle is especially impressive.

  In the short-term, the market can be highly erratic, but in the long term, its judgments are wise.

  That’s all for now. Remember: On Christmas Day, I’ll send you the names of the 25 stocks for the 2025 Buy List. This will be our 20th Buy List!

  – Eddy

• Morning News: December 17, 2024
  Eddy Elfenbein, December 17th, 2024 at 7:06 am

  The Housing Affordability Crisis Is Going Global

  China Plans Around 5% Growth Goal, Higher Deficit, Reuters Says

  German Business Mood Hits Postpandemic Low, Stoking Recession Jitters

  Germany’s Stumbling Economy Stalls Property Market Recovery

  Bank of Spain Raises 2025 Growth Forecast on Domestic Demand

  2024 the ‘Year of the Bond’ as Record Inflows Top $600 Billion

  Debt Risks That Lured Bessent to US Treasury Now Loom Large

  Calling an End to Fed Rate Cuts Is Premature

  Bracing for a Fed Pullback

  T. Rowe Raises Prospect of 6% Treasury Yields on Fiscal Risk

  New World Disorder Is Disrupting Business as Usual

  Trump Plays Chicken With the Madman Theory

  High on Hope, Wall St. Hears What It Wants From Trump

  Crypto Got What It Wanted in November’s Election. Now What?

  Dealmakers Await Trump After Bouncing Back With $3 Trillion Haul

  The Property Brothers Say Hold Off on the Big Home Renovation in 2025

  Weather Derivatives Are Booming in an Unpredictable Climate

  Climate Change Is Stealing Weeks of Winter, Unnerving Ski Area Owners

  Broadcom’s ‘Nvidia Moment’ Has Arrived. Now It Needs to Deliver

  Can the US Power Industry Meet AI’s Steep Energy Demands?

  Gamers Won’t Accept Underwhelming Virtual Reality Goggles

  Walmart’s DEI Compromise Holds Lessons for Corporate America

  Food Fight With Kroger Spells Trouble for Albertsons

  Giant Companies Took Secret Payments to Allow Free Flow of Opioids

  Pfizer Sees 2025 Revenue in Line With Wall Street Views

  ‘Life-Changing’ Psychedelics, for When Life Is Ending

  Sandoz Agrees on $275 Million Settlement in U.S. Price-Fixing Case

  Here’s a Hollywood Twist: Streaming Success Runs Through Theaters

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• Morning News: December 16, 2024
  Eddy Elfenbein, December 16th, 2024 at 7:04 am

  China Will Keep Trying to Spur Consumption Without Big Stimulus

  Vietnam Won Big in Donald Trump’s First Trade War. Now, It’s a Target.

  Germany Is Unraveling Just When Europe Needs It Most

  ECB Set to Lower Key Rate Further as Protectionism Threatens, Says Lagarde

  Sterling Rises After U.K. PMI Data

  How ‘Economic Statecraft’ Evolved Into a Tool of US Foreign Policy

  Powell’s Fed Appears Headed for Another Collision With Trump

  The Fed Faces an Important Choice After This Rate Cut

  Inflation Is Coming Down, But Prices Won’t Stand Still in 2025

  Wall Street Eyes 2025 Volatility Spikes on Trump Tariffs, Geopolitics

  Mega Deals Won’t Lead M&A Rebound Under Trump

  Private Credit Wants a Top Spot on Your Mobile Investing App

  How Your Spending Changes After Your Political Party Wins

  The Biden Overtime Rule Was Struck Down. Now, Some Workers Are Losing Pay Raises

  Insurance Startup Stand Has a Plan to Cover ‘Uninsurable’ Homes

  Shell, Partners to Invest $5 Billion in Nigeria’s Deep-Water Oil

  UK and Norway Look to Carbon Pipeline Deal as Starmer Visits

  How Can the World Move Beyond Combustion Cars? Look to Norway

  Automakers Thrived in the Pandemic. Many Are Now Struggling.

  The Federal EV Tax Credit Has an Uncertain Fate. What Car Shoppers Should Know

  A Ride-Hailing Start-Up in Washington Tries to ‘Out-Uber Uber’

  Another Pandemic Is Inevitable, and We’re Not Ready

  Skydance Deal Sparks Studio Protest Over Paramount Chair Payout

  Alibaba Said to Near $1 Billion Intime Sale to Youngor Fashion

  Amazon Disregarded Internal Warnings on Injuries, Senate Investigation Claims

  Cruise Lines Are Basking in Holiday Cheer

  Four Years Later, CrossFit’s Disgraced Guru Attempts a Comeback

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• Morning News: December 13, 2024
  Eddy Elfenbein, December 13th, 2024 at 7:03 am

  The Global Fertility Trade: A Story of Extraction, Exploitation and Opportunity

  China’s ‘Lower for Longer’ Pledge Has Sent Bonds Into Unknown

  Trafigura Profit Drops 62% After ‘Massive Problem’ in Mongolia

  European Central Bank Cuts Interest Rates as the Economy Weakens

  Bundesbank Cuts German Growth Forecasts, Warning of Escalating Protectionism

  Germany’s Goods Surplus Shrinks as Trade Uncertainty Mounts

  U.K. Economy Weakens Again in Blow to Government’s Growth Plans

  The Fed Can’t Ignore All of Trump’s Intentions

  The World According to Trump Is Already Here

  Trump’s Tax Cuts May Fail to Drive Much, If Any, Economic Boost

  When It Comes to Grocery Prices, Trump Suddenly Changes His Tune

  US Regulator’s ‘Problem Bank’ List Grows as Industry Profits Dip

  Crypto Ads Crackle in a Trump-Energized Landscape

  Can Crypto Bros Save Luxury in 2025?

  Cantor Fitzgerald Pays $6.75 Million to Settle SEC Charges Over Misleading SPAC Disclosures

  What Is Venture Capital Now Anyway?

  Robinhood Plays the Long Game by Betting on the Kids

  Dollar Stores Are Flashing a Warning Sign About Lower-Income Consumers

  Turkey’s Aydem Group Plans 2025 IPOs for Power Grid Operators

  Pizza Buffets, Fishing Boats and Bathroom Lines Are All Getting an AI Makeover. Thank One Man.

  AI Wants More Data. More Chips. More Real Estate. More Power. More Water. More Everything

  Broadcom Shares Jump After Chipmaker Predicts AI Sales Surge

  Qatar Air Seeks to Drop Boeing 737s After Making Up With Airbus

  Media Moguls Set the Stage for Deal Mania

  YouTube TV Raises Monthly Charge 14 Percent, to $82.99

  Super-Spicy Noodles Make Former Stay-at-Home Mom a Billionaire

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• Morning News: December 12, 2024
  Eddy Elfenbein, December 12th, 2024 at 7:03 am

  Germany Faces Tepid Growth Without Policy Changes, Ifo Says

  Musk and Milei Belong to the Same Cult of Disruption

  In Milei’s Argentina, Economic Albatross Is Tamed but Life Is Much Harder

  China Signals More Fiscal Stimulus, Rate Cuts to Lift Growth

  China’s Lust for Gold Exploited by Scammers, Money Launderers

  Trump Extended Xi Longshot Invitation to Inauguration, CBS Says

  Market-Moving Data Under Threat as Trump Returns to Washington

  Economists Are Wrong a Lot But Not About Tariffs

  Government Statistics Come Under Siege From All Corners

  Inflation Took a Licking. Why’s It Still Ticking?

  Inflation Is Stuck. Can Trump Unstick It?

  Investors Shouldn’t Count on Much Help From the Fed Next Year

  Neutral-Rate Guessing Game Comes With High Stakes in Bond Market

  Blackstone Deal Shows Funds Wooing Insurers Still Works

  Blackstone to Buy Tokyo Office Complex for $2.6 Billion

  New Federal Rule Limits Overdraft Fees at Large Banks

  Police Investigate NYC ‘Wanted’ Posters of Finance Executives

  The C.E.O.s Are Tripping. Can Psychedelics Help the C-Suite?

  The 25 Richest Families in the World – 2024

  Nvidia Steps Up Hiring in China to Focus on AI-Driven Cars

  Tencent’s Latest Hit Game Took a Decade of Community Building

  What Is the Hershey Trust and Why Can It Block Takeover Deals?

  Failure of Kroger-Albertsons Merger May Curb Grocers’ Advertising Ambitions

  Doctors Say Dealing With Health Insurers Is Only Getting Worse

  Bausch + Lomb Confirms It Is Exploring a Potential Sale

  Carlyle Pauses Luxury Bets After Making a Killing on Golden Goose

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• Morning News: December 11, 2024
  Eddy Elfenbein, December 11th, 2024 at 7:02 am

  College Graduates Are Turning on Milei After Helping Him Win Power

  Powerful Families Who Dominate South Korea Face an Investor Revolt

  Oman Sticks to Green Hydrogen Ambition Despite Industry Setbacks

  Exxon Raises Capital Spending as Worldwide Oil Glut Looms

  Exxon Plans to Sell Electricity to Data Centers

  US Considers New Russia Oil Sanctions to Weaken Putin Ahead of Trump

  Trump’s Return Gives China a Shot at Being the Next Weather Superpower

  Xi Readies Bargaining Chips for US Trade War

  China Gears Up for US Trade Fight by Showcasing New Tools

  The F.T.C.’s Next, More Deal-Friendly Leader

  Trump’s Nominees Are Testing the GOP’s Guardrails

  Trump’s Pick to Run NASA Is a SpaceX Fan and Funder

  US Inflation Data to Show Fourth Consecutive Month of Firm Gains

  Bond Investors Await Inflation Data That Could Sway Fed Choice

  Wall Street’s Titans Can’t Wait for Trump 2.0

  Does Bitcoin at $100,000 Signal a Last Laugh for HODLers?

  Hedge-Fund Startups Dwindle as Managers Battle Pressure on Fees

  BlackRock’s Private Markets Push May Not Be Over After 2024 Buyout Spree

  You’ll Take Private Assets, and Like It

  Houthi Attacks Turn Back the Clock for Shipping as Costs Pile Up

  50 Companies to Watch in 2025

  Lawmakers Plot to Force Health Insurers to Sell Off Pharmacies

  Anger at CEOs Goes Beyond the Healthcare Industry. Here’s Why.

  For Tesla Owners, a Referendum Through Bumper Stickers

  Vodafone Deal May Be Harbinger of Less Resistance to Big Mergers

  Opioids Ravaged a Kentucky Town. Then Rehab Became Its Business.

  Patterson Cos to Be Acquired by Patient Square in $4.1 Billion Deal

  Kroger, Albertsons Could Turn to Ad Business as Deal Termination Looms, Analysts Say

  Macy’s Shares Fall After Profit Hit by Accounting Error

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• CWS Market Review – December 10, 2024
  Eddy Elfenbein, December 10th, 2024 at 5:39 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Before I get to today’s issue, I have a quick announcement.

  Be sure to circle December 25 on your calendar. That will be a very special day this year. That’s when I’ll email you the Buy List for 2025.

  This will be our 20th annual Buy List. In honor of the new Buy List, the New York Stock Exchange will be closed on December 25. I want to thank the exchange for the recognition.

  As usual, our Buy List will have 25 stocks. We will add five names and delete five names. All the stocks will be equally weighted at the beginning of the year. The New Buy List will go into effect at the start of trading on January 2 which will be the first day of trading in 2025.

  Mondelez Is Looking to buy Hershey, Again

  Speaking of our Buy List, we had exciting news this week. Bloomberg reported that Mondelez (MDLZ) is interested in buying Hershey (HSY).

  This isn’t the first time that Mondelez has looked into buying Hershey. In 2016, they looked into it but Hershey wasn’t interested.

  To be clear, there’s no deal on the table, and Bloomberg said, there’s “no certainty that discussions will lead to a deal.”

  

  If these two got together, it would be a huge deal. Mondelez already owns Oreo and Cadbury. A deal like this does make sense. The fact is that consumers are becoming more health conscious. Recently, Mars bought Kellanova for close to $30 billion.

  I can see what Mondelez is thinking, and it makes sense. Buying Hershey would give a big life to Mondelez’s presence in the North American market. Mondelez only gets 31% of its sales from North America compared to 93% for Hershey.

  Shares of HSY have not done well this year. The global cocoa crop had a very poor year and Hershey’s stock felt it. A few weeks ago, the chocolatier cut its sales and earnings forecast. Cocoa prices are still quite high. In a separate report, Hershey said that the head of its confectionary business will leave after three months on the job.

  One important issue with buying Hershey is the Hershey Trust. The trust owns almost all the “B” shares of HSY, so any deal needs its approval. Historically, the trust has been opposed to any deal. This time could be different.

  Even though no deal has been announced, the stock market has been having a grand time with shares of HSY. At one point, HSY was up 19% in Monday’s trading.

  At the end of the day, HSY closed higher by $18.95 per share or 10.85%. That gave Hershey a market value of about $39 billion while shares of Mondelez fell a bit, and Mondelez has a market value of $82 billion.

  What would be interesting is that if the Hershey Trust is open to the idea of a sale, perhaps other players would jump in. In fact, you could even see a bidding war for Hershey break out. I’m sure the folks at Nestlé will be watching what happens.

  The Jobs Market Is Still Doing Well

  On Friday, the government reported that the U.S. economy created 227,000 net new jobs last month. That’s quite good. Wall Street had been expecting a gain of 214,000. Also, the anemic number for October was revised higher by 36,000. The storms down south and the Boeing strike impacted the original report. The number for September was also revised higher.

  

  As expected, the unemployment rate ticked up by 0.1% to 4.2%. The unemployment rate has now been below 4.3% for the last 37 months in a row. In April 2020, the unemployment rate peaked at 14.9%.

  Job gains were focused in health care (54,000), leisure and hospitality (53,000), and government (33,000), sectors that have consistently led payroll growth for the past few years. Social assistance added 19,000 to the total.

  At the same time, retail trade saw a decline of 28,000 heading into the holiday season. With Thanksgiving coming later than usual this year, some stores may have held off hiring.

  The broader U-6 rate increased to 7.8%. Also, the labor force participation rate dropped 0.1% to 62.5%. That number is often misinterpreted on social media. In reality, the labor force participation rate is strongly influenced by demographic trends. It’s not a good barometer for the overall health of the economy.

  One concerning statistic in the jobs report is that the number of full-time jobs fell by 111,000 while part-time jobs dropped by 268,000. For black workers, the unemployment rate increased by 0.7% to 6.4%.

  Average hourly earnings rose by 0.4% for the second month in a row. Over the last 12 months, average hourly earnings have increased by 4%.

  The next big report comes tomorrow morning when the CPI report for November is released. It appears that the improvements to inflation have crawled to a halt. We’ll learn more tomorrow. Wall Street expects to see a gain of 0.3% for both the core and headline rate on inflation. It appears that it was quite easy to bring inflation down from 9% to 4%, but getting it from 4% to 2% is proving to be very difficult.

  The Federal Reserve meets next week, and it’s very likely that the Fed will again lower interest rates by 0.25%. This will be the Fed’s third rate cut over the last three months, and it will bring the Fed’s target range for the Fed funds rate to 4.25% to 4.50%.

  After that, it looks like the Fed may pause on any rate cuts at its January meeting. Traders see the Fed cutting twice more in the first half of 2025, but after June, they don’t expect any more cutting. If that’s the case, then the market may not be so hot next year. There are few things Wall Street likes more than falling interest rates.

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy