M Notes: Mon, 12-29

MY TOP TEN ECONOMIC STORIES OF THE YEAR:

10.   The Lottery.   There were three large Jackpots this year.  Mega Millions had a $980 Million Jackpot that hit in November.  Powerball had two Billion dollar Jackpots.  The first one, $1.8 Billion, hit in early September.   The second one hit on Christmas Eve:   $1.8 Billion.  If the winner took the Cash Option, put 10% into a Charitable Trust, lost ½ of the remainder to taxes… they will take home $375 Million.   

9.   Oil.  It started at $72/barrel.  It hit $80/barrel in Mid-January.  It’s now at $57/barrel.

8.   Inflation.  Three years ago (right now) Inflation was 7.1%.  The Federal Reserve’s Target remains at 2%.  When Trump took office again in January, Inflation was 3.0%.   It’s now at 2.7%.  

7.   Corporate Profits.  Markets go higher when companies make profits.  One metric to measure that is Earnings Per Share (EPS).  You can do that for specific Markets as well.  The EPS for the S&P500 was a record in 2024:   $235.  It’s expected to finish with another record in 2025:  $260.  And it’s expected to be even higher in 2026.

6.   NVIDIA hits a $5 Trillion Market Cap.  When you multiply the outstanding number of shares for a company, by their share price, you get their Market Cap.  NVIDIA hit the $5 Trillion amount on October 29th.  It’s now closer to $4.24 Trillion.  To illustrate how big that is:  you would need 52 Sherwin Williams companies ($81 Billion Market Cap) to equal NVIDIA.  

5.   The National Debt.  $38. Trillion (and counting).  How long does it take for the National Debt to go up just $1 Million?  Answer:  21 seconds.

4.   The Dow hits 48,000.  The Dow hit 30,000 in November 2020.  It his 40,000 in July 2024.  And it hit 48,000 last month… November 2025.  50,000 is not far away.  

3.   The Federal Reserve.   They have two mandates:  stable prices and maximum employment.  Fed Chair Jerome Powell is probably the 2nd most powerful economic person in the World.   The focus this year was would the Fed cut their interest rate.  If so, how many times?  And how often.  Answers:   three ¼ cuts, one in September, the next in October, with the final one in December.  

2.  Donald Trump.   It’s hard to believe Trump has only been in Office for less than a year.  He campaigned on cutting government spending.   Check.  He campaigned on closing the Border.  Check.  And he campaigned on Tariffs.  Lots of predictions of Doom and Gloom regarding Tariffs.  Nada (at this point).  We actually had a Surplus in September.  And Trump has secured numerous hundred Billion dollar investments in our Country.  Like him or hate him, Trump is one of the few people in the World who can moved Markets when he talks.  He’s currently the most powerful and influential economic person in the World.

1.   The Government Shutdown.  It began on October 1st, the beginning of the new fiscal year.  It lasted 43 days, until November 12th.   It was the longest Government Shutdown in US history.  And it didn’t have to happen.  The Republican controlled House passed a clean CR in mid-September, that would keep government spending in place while negotiations continued.  Senate Minority Leader, Democrat Chuck Schumer convinced most of his colleagues to shut the government down.  And they did so for 14 votes over the 43 days.  Thankfully that changed on the 15th vote, but we’re still catching up on economic data that wasn’t released during the Shutdown.   And… it may happen all over again in just six weeks (the end of January).  

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* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.    The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.  The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.  Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information. 

* The National Debt figure comes from usdebtclock.org.   

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.  Consult your financial professional before making any investment decision.  You cannot invest directly in an index.   Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss.  Investments in the securities markets involve risk, such as loss of your principal.