M Notes: Mon, 12-30

Market Notes:  Monday, 12-30-24

THE TOP 10 ECONOMIC STORIES OF 2024 

10.    Oil.  We began the year at $71/barrel.  It peaked at $87/barrel in April, with the low being $66/barrel in September.  It closes the year… about $70/barrel.  

9.  The National Debt.  In the last Fiscal year, ending in September, our National Debt grew $2 Trillion.  It’s now over $36 Trillion (and climbing).  It’s been reported our Nation is now spending more to pay Interest on the National Debt, than we are on National Defense.

8.  Hurricane Helene.  It hit Florida the end of September.  We’re all aware of the impact it had on Western North Carolina (they remain in our prayers).  The damage, so far, is $60 Billion.

7.  Bitcoin.  It started the year at $42,000/share.  After recently peaking over $106,000/share, it’s now $93,000/share.

6.   Artificial Intelligence.  AI seems like it’s the focus of every business.  And the lead AI company is Nvidia (who’s market cap is over $3 Trillion).   

5.  The Magnificent Seven’s Marke Cap Dominance.  Take Nvidia and add:  Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla.  Now you have the Magnificent Seven.  Take the number of outstanding shares and multiply it by the stock price… and you get a company’s market cap.  The market cap for the entire S&P 500 is about $46 Trillion.   The market cap of the Magnificent Seven is $18 Trillion. Seven stocks make up 40% of the S&P 500’s market cap, with the other 493 making up 60%).  

4.  Market Milestones.  And they’re all recent.  The S&P 500 hit 6,000 for the first time on November 26th.  The Dow 30 hit 45,000 for the first time on December 4th.  And the Nasdaq hit 20,000 for the first time on December 11th.  It’s been a wonderful year in the Stock Market.  

3.  Inflation. We started the year with the Consumer Price Index at 3.4%.   The CPI peaked in March at 3.5%.   The low was 2.4% in September.   It’s now at 2.7%.  But remember, it’s cumulative.  Meaning:  it all adds up on top of each other.  And we’ve certainly seen that impact what we pay at the grocery store.

2.  The Federal Reserve.  When I was growing up a popular ad was from an investment firm named E.F. Hutton.  “When E.F. Hutton talks, people listen.”  Well, in today’s economic world, everything the Fed does is completely dissected.  When the Federal Reserve talks, everyone is listening.  And we saw just a few weeks ago how that can impact Markets (in that case it wasn’t positive).   

1.  Donald Trump.  Love him or hate him.  Whether you voted for him, or you didn’t.  Donald Trump has been dominating the news.  Numerous corporate leaders have been making the pilgrimage to see him at Mar-a-Lago.  Normally we’re hoping for a Santa Claus rally this time of year.  This year, with the exception of the Fed’s impact a couple of weeks ago, it’s been all about the Trump Trade.  And that makes Donald Trump the #1 Economic Story of the Year.