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Hot Tips
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TACO Rides Again,
with Trump bailing on a trade war with Europe and claiming he won what the US already had. A major Air Force base has been at Thule since 1954. I promised you smaller returns this year with more volatility, and we are getting it in spades. The Dow sold off 1,200 points, then made it all back for an unchanged week, but we got stopped out of our Apple position.
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The “Sell American” Trade is Back on,
with Europeans discussing dumping all their US stocks and bonds, some $8 trillion worth. Markets behaved this week like this was a possibility, with US stocks, bonds, and currency all tanking. Europe would rather invest in friends than enemies. The self-immolation of America continues.
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Weekly Jobless Claims Rise,
up 1,000 to 200,000. The Labor Department's weekly jobless claims reports have, in recent weeks, been clouded by challenges adjusting the data for seasonal fluctuations around the year-end holiday season and turn of the year. Through the volatility, however, the labor market has remained in what economists and policymakers call a "low-hiring, low-firing" state.
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Core PCE Rises,
from 2.7% to 2.8%, according to the central bank's preferred gauge released Thursday. The personal consumption expenditures price index, a Commerce Department measure the central bank uses as its main forecasting tool, showed inflation at 2.8% for the month, both for headline and core, in line with the Dow Jones consensus. In addition, the department's Bureau of Economic Analysis reported that the rate for October was 2.7% on both a headline and core basis, the latter excluding volatile food and energy prices. The monthly figures showed a 0.2% increase for both months.
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Netflix Tanks 5% on Good Earnings but Weak Guidance.
Analysts across Wall Street cut their (NFLX) price targets after the streamer highlighted other areas of concern, such as slowing momentum in average viewing hours per member. Netflix earned 56 cents per share on $12.05 billion in revenue. That slightly exceeded the 55 cents per share and revenue of $11.97 billion. Along with slowing viewing hours, analysts were also disappointed with the company’s earnings and revenue guidance for the current quarter and its margin guidance for the full year 2026.
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Trade War 2.0 Destroys Stocks,
taking the Dow Average down 870 points, the most in four months. Volatility spiked from 16% to 26% over fears that this trade war will deliver an April result, or down 20% for stocks. Investors are in “take the money and run” mode, especially for big stocks like Apple (AAPL) and Nvidia (NVDA).
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Japanese Bond Markets Crash,
taking yields up to 4.3%, an all-time high. A new stimulatory budget and a weak yen are expected to cause inflation. It rattles the world because a lot of financing was done in a formerly low-interest-rate world.
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Denmark Dumps $100 Million of US Treasuries,
their entire holdings, citing the deteriorating finances of the US government. Standard & Poor’s downgraded US debt last May. No doubt Greenland was a factor, too.
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Trump Says No Force to Takeover Greenland,
and markets rally….a bit. Once confidence is shattered, it is hard to get it back. The “Sell America” trade is back with US stocks, bonds, and currency all diving.
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Netflix Tanks 5% on Good Earnings but Weak Guidance.
Analysts across Wall Street cut their (NFLX) price targets after the streamer highlighted other areas of concern, such as slowing momentum in average viewing hours per member. Netflix earned 56 cents per share on $12.05 billion in revenue. That slightly exceeded the 55 cents per share and revenue of $11.97 billion. Along with slowing viewing hours, analysts were also disappointed with the company’s earnings and revenue guidance for the current quarter and its margin guidance for the full year 2026.
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Greenland Takeover Attempt Gut Punches Stocks,
with the Dow Average opening down 700. The bond market got trashed too, with ten-year yield hitting 4.32%, a five-month high. There are fears that the next bond auction will be boycotted and fail. A constitutional crisis a day is not working for investors. Gold (GLD) and Silver (SLV) are the only safe assets here and are through the roof.
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China Halts Shipments of Nvidia H200 Chips,
by blocking entry by customs officials. Parts suppliers for the H200 have halted production. The administration recently lifted national security bans after claiming a 25% export tax for itself. Nvidia had expected one million orders for the H200.
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Netflix Ramps Up Warner Brother Bid to All Cash.
Netflix has switched to an all-cash offer for Warner Bros Discovery's studio and streaming assets without increasing the $82.7 billion price in a bid to shut the door on Paramount's rival efforts to snag the Hollywood giant. The new all-cash bid - at $27.75 a share - has unanimous support from the Warner Bros board, according to a Tuesday regulatory filing. (NFLX) rose a dollar on the news. Avoid for now.
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Banks Continue to Fall on 10% Credit Card Cap.
It was a great trade while it lasted. It was our number one pick, and (GS) rose by 70% in six months. Banks will come back, but only after the nonstop international crisis dials down.
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DH Horton Beats.
Incentives helped the company to drive a 3% increase in its net sales orders to 18,300 homes in the first quarter ended December 31. Shares of the company were up 4% in premarket trading. Affordability pressures and cautious consumer sentiment were still pressuring demand for new homes. The average rate on the popular 30-year fixed-rate mortgage declined to 6.06%, the lowest level in more than three years, mortgage finance agency Freddie Mac said. It averaged 7.04% during the same period a year ago.
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Goldman Sachs (GS) Blows Out Earnings,
on record stock trading profits, sending the shares soaring. Goldman's investment banking revenue jumps 25% in Q4. Fees from asset management hit a record of $3.09 billion. Buy (GS) on dips.
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Existing Home Sales Jump 5.1% from November,
to a seasonally adjusted 4.35 million units. Sales were up 1.4% YOY. Inventory stood at 1.18 million, down 18%, up 3.5% YOY to a 3.5-month supply. The median sales price was $05,000. Higher-end sales are selling better.
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Morgan Stanley Surges on Investment Banking Windfall.
Morgan Stanley investment banking revenue surges 47% in Q4, led by debt and M&A. Reported record annual revenue of $70.65 billion, equity trading revenue at new highs. Wealth management reaches $9.3 trillion in AUM, close to the $10 trillion long-term goal. CEO Ted Pick says the bank has excess capital but will be patient in considering acquisitions. Buy (MS) on dips.
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4.5 Social Media Accounts are Closed in Australia,
as an under-16 ban kicks in. Tech companies are protesting that the new law is too draconian. The figures represent the first government data on compliance and suggest platforms are taking significant steps to adhere to a law that could see them fined up to A$49.5 million ($33 million) for non-compliance, but does not hold children or their parents liable.
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Weekly Jobless Claims Fall,
down 9,000 to 198,000. The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, but the drop was likely due to ongoing challenges adjusting the data for seasonal fluctuations around this time of the year. The labor market remains in what economists and policymakers have termed a "low-hire, low-fire" state. Economists say President Donald Trump's aggressive trade and immigration policies have reduced both demand for and supply of workers. Businesses are unsure of their staffing needs as they invest heavily in artificial intelligence, which is curbing hiring.
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Silver Tops $92 an Ounce,
sending the miners soaring, as confidence in US monetary policy collapses. In pre-market trade, U.S.-listed shares of Hecla Mining (HL), which owns Greens Creek Mine in Alaska, one of the biggest silver mines in the world — jumped 4.2%. Endeavor Silver was 2.5% higher, while First Majestic Silver was last seen trading up 2.7%. Coeur Mining, the operator of the Rochester mine in Nevada, gained around 2.6%.
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Saks Fifth Avenue Files for Bankruptcy.
The company has been running out of cash and struggling to pay its bills since its acquisition of Neiman Marcus for $2.7 billion in 2024. Saks had struggled to line up bankruptcy financing because some investors were concerned the company would not be able to successfully reorganize. It’s another step towards the end of brick-and-mortar retail. Long a drainer of my wallet, it was where I made a last-minute buy of a white dinner jacket for a Queen Mary 2 Cruise.
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Mortgage Refinance Demand Soars 40%,
after ten-year interest rates briefly fall below 6.0%. Refinance demand, which is most sensitive to daily rate changes, was 128% higher than the same week a year ago.
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CrowdStrike (CRWD) Wins Lawsuit,
over the massive software outage last summer. The Outage crashed 8 million computers, and especially hurt Delta Airlines (DAL). A judge found there was no intent to defraud. The stock dropped 3% on the news.
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US Retails Sales Beat in November,
as motor vehicle purchases rebounded and households increased spending elsewhere. Retail sales rose 0.6% after a downwardly revised 0.1% drop in October, the Commerce Department's Census Bureau said on Wednesday. Retail sales, which are mostly goods and are not adjusted for inflation, are advancing 0.4% after being unchanged as previously reported. The Census Bureau is catching up on data releases after delays caused by the 43-day government shutdown.
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