Core Viewpoint - The S&P 500 experienced a significant drop of over 100 points last week, disrupting expectations for a strong year-end rally in 2025 [1] Group 1: Market Analysis - The decline in the S&P 500 may be linked to margin calls in silver, indicating potential volatility in the commodities market [1] - The article highlights the importance of a proprietary trading system developed over 15 years, which incorporates various analytical methods including fractals, Elliott Wave, and macroeconomic drivers [1] Group 2: Analyst Background - The chief analyst at Matrixtrade, Andrew McElroy, has extensive experience in market analysis and manages a family portfolio of stocks and ETFs [1]

Group 1: Australian Tax and Transfer System - The Australian tax and transfer system has evolved, with the post-tax income of individuals aged 75 and above now matching the average income, a significant shift from 25 years ago when it was only 75% of the average [1] - Older Australians, particularly those over 60, now enjoy a post-tax income similar to mid-career working age Australians, which is much higher than that of Australians aged 18-30 [4] - The proportion of Australians over 65 paying tax has halved in the last 20 years, indicating a shift in the tax burden and benefits received by different age groups [6] Group 2: Economic Implications - The Australian Budget is facing a structural deficit, with negative cash balances projected for every year going forward, necessitating potential tax increases or government spending reductions [5] - The ANU Report suggests that budget repair should involve a mix of tax increases and spending reductions targeted at older Australians [6] Group 3: Market Performance - In December 2025, the ASX 200 increased by 3.3%, while the FTSE 100 rose by 2.2%, contrasting with a flat performance of the S&P 500 [7] - For the calendar year 2025, the ASX 200 was up 7%, the FTSE 100 increased by 21%, and the S&P 500 rose by 16%, despite the Slack Portfolio experiencing a negative performance of down 3.1% [8] Group 4: Portfolio Management - The Slack Portfolio has been negatively impacted by significant losses in key stocks, including CSL (-35%), Goodman Group (-17%), and Wisetech (-41%) [10] - Shares in Wesfarmers and Coles Group have been moved from the growth-oriented Slack Portfolio to a Stable Income Fund due to their relatively weak projected growth of 5%-10% [13]

Core Insights - The year-end rally for stocks has been disappointing, with the SPDR® S&P 500 ETF Trust (SPY) returning only 1% in December and the Nasdaq 100 ETF (QQQ) finishing flat [1] - US large caps outperformed small and mid-cap peers with an 18% return for the year, but lagged behind international equity markets [1] Market Performance - The Russell 2000 ETF (IWM) experienced a fractional decline in December, while the Vanguard FTSE All-World ex-US ETF (VEU) returned nearly 3% [2] - The Aggregate Bond ETF (AGG) remained close to unchanged, and the US Dollar ETF (UUP) decreased by 1% [2] - WTI Crude Oil ETF (USO) and Bitcoin ETF (IBIT) fell between 2% and 4%, while gold surged over 60% in 2025, marking its best year since 1979 [2] Sector Performance - In December, five out of eleven S&P 500 sector ETFs were negative, with Utilities (XLU) being the primary drag due to higher long-term interest rates and a cooling AI trade [4] - Financials led the S&P 500 sector performance with a 4% increase, followed by Communication Services with a 3% gain, and comparable increases in Materials (XLB), Industrials (XLI), and Consumer Discretionary (XLY) [3]

Market Overview - Major U.S. stock indexes, including the S&P 500, Dow Jones Industrial Average, and Nasdaq, ended the holiday-shortened week with solid gains, with the S&P 500 reaching fresh record highs and up approximately 18% in 2025 [2][4] - Precious metals, particularly silver and gold, saw new highs driven by strong demand and supply constraints [2] Technology Sector - Nvidia (NASDAQ:NVDA) led technology gains, supported by a significant licensing agreement with AI-chip start-up Groq, enhancing its competitive position [3] - Micron (NASDAQ:MU) continued its year-long rally, becoming one of the top performers in the S&P 500 for 2025 [3] - Nvidia plans to start shipping H200 AI chips to China by mid-February, potentially reopening a major market previously affected by export restrictions [7] Retail and Space Stocks - D-Wave Quantum, Rigetti Computing, and IonQ experienced stock price increases due to a "Santa Rally" driven by retail investor momentum, with D-Wave's stock rising nearly 20% after its system was confirmed for a CES 2026 showcase [6] - Space-related stocks surged following President Trump's executive order aimed at enhancing U.S. dominance in space, with companies like Sidus Space and Rocket Lab benefiting from the optimism surrounding commercial space activities [8] Defense Sector - China imposed sanctions on several U.S. defense companies, including Boeing and Northrop Grumman, in response to a significant U.S. arms sale to Taiwan, which has raised tensions between the two nations [11] Oracle's AI Strategy - Oracle Corp. (NYSE:ORCL) shares fell approximately 30% this quarter due to investor concerns over its aggressive AI infrastructure spending, despite adjusted earnings exceeding forecasts [12]

Market Performance - The U.S. market closed positively on Christmas Eve, with the Dow Jones Industrial Average increasing by 0.60%, setting a new record at 48,731.16, driven by gains in 28 of its 30 components [2] - The S&P 500 also achieved a record close of 6,932.05, with only 111 components declining, supported by a diverse range of firms [3] - The Nasdaq composite rose by 0.22%, contributing to the overall positive market sentiment [3] - The Russell 2000 index increased by 0.20%, recovering from previous declines amid concerns over GDP growth impacting Federal Reserve rate cuts [3] Notable Stock Movements - Edgewise Therapeutics was the top performer, surging by 25.2% after completing a phase two trial for its heart disease drug [4] - Other significant gainers included Travere Therapeutics (+13.9%) and UiPath (+7.5%), indicating strong performance in the healthcare and technology sectors [4] - Conversely, AST SpaceMobile (-8.6%), Hycroft Mining (-8%), and D-Wave Quantum (-5.5%) experienced declines, reflecting a pullback in previously popular retail trades [5] Economic Data - Jobless claims data showed a mixed trend: initial claims decreased to 214,000 from 224,000, while continuing claims rose to 1.923 million from 1.885 million [6]

Market Overview - The S&P 500 reached a new record high, buoyed by investor confidence in corporate earnings growth and easing inflation for 2026, alongside the Federal Reserve's QE Lite injecting $40 billion into the market [1] - The VIX index remains low, indicating calm in equities, with no down month since April [1] - Precious metals, including gold, silver, and platinum, have hit record highs, driven by geopolitical concerns and expectations for interest rate cuts in 2026 [6][13] Corporate News - Sanofi agreed to acquire Dynavax Technologies for approximately $2.2 billion, aiming to expand its vaccine business [3][10] - Nike shares rose by 2.1% after Apple CEO Tim Cook purchased $2.95 million worth of Nike stock [1][5] - Intel shares fell by 3.2% following reports that Nvidia halted a test using Intel's technology [5][10] Economic Indicators - The latest MBA Mortgage Applications decreased by 5.0%, indicating a potential slowdown in the housing market [1] - Initial jobless claims are expected to be around 223,000, reflecting ongoing labor market conditions [29] Commodity Market - Gold prices reached $4,500 per ounce for the first time, while silver and platinum also surged to all-time highs, marking their best yearly gains since 1979 [6][8] - Copper prices hit a new record of approximately $12,200 per ton, set for its largest annual rise since 2009 [6][13]

Group 1 - The Federal Reserve faces challenges as the economy remains strong while job growth is slowing, creating a complex situation for monetary policy [1] - Alibaba is highlighted as a potential growth opportunity in China for companies like Nvidia and AMD, indicating a shift in market focus [1] Group 2 - The article suggests that the tech industry, particularly in the semiconductor sector, may find new opportunities in the Chinese market, which could lead to increased competition and innovation [1]

Core Insights - Precious metals, including gold, silver, and platinum, have reached all-time highs, indicating a potential shift in market dynamics and investor sentiment [1][2][3]. Group 1: Precious Metals Performance - Gold has surged past $4,500, setting a new all-time high at $4,526 [2]. - Silver peaked at $72.7, with expectations of reaching $80 by year-end [2]. - Platinum recorded a peak price of over $2,370, while palladium surpassed $2,000, a level not seen since November 2022 [3]. Group 2: Market Drivers - The performance of precious metals is attributed to a combination of rate cuts, geopolitical tensions, and the dollar debasement trade [3]. - Copper also saw significant gains, reaching $12,000 per ton, marking its largest annual gain since 2009 [3]. Group 3: Economic Implications - Analysts suggest that the rally in precious metals may signal underlying macroeconomic issues, including the potential for the highest inflation in U.S. history [4]. - Despite a reported GDP growth of 4.3% in Q3, concerns remain about the reliability of official economic data [5]. - The rapid increase in silver prices is viewed as a warning sign of declining confidence in political leadership and fiat currencies [6].

Market Trend - Precious metals sector is bullish across all timeframes [1] - Expecting a Santa Rally blow-off top [1] Specific Metals - Bullish sentiment towards silver, platinum, and palladium [1]

Core Viewpoint - Yardeni Research projects significantly higher gold prices, forecasting $6,000 per ounce by the end of 2026 and $10,000 by the end of the decade, following a bullish trend in precious metals [4][5]. Market Performance - The S&P 500 has shown a modest increase of 1.6% in December, contrasting with a strong performance in precious metals, where gold has risen by 9% and silver by 36% during the same month [2][3]. Gold Price Forecast - Yardeni Research initially predicted gold would reach $4,000 by the end of 2023 and $5,000 by the end of 2024, but has now raised its year-end 2026 target to $6,000, indicating a more optimistic outlook [4][5]. - The firm believes that if the S&P 500 reaches 10,000 by the end of 2029, gold prices should align at $10,000 based on their trend analysis [6]. Investment Strategy - The firm turned bullish on gold in early 2024, attributing the rally in precious metals to increased purchases by central banks following geopolitical tensions, particularly the freezing of Russia's international reserves by the U.S. and EU [7].