Welcome back. Let's tee up the trading day ahead and bring in our all-star panel. Mike Xandandy, Mark Xandy is chief economist at Moody's Analytics.David Zervos is chief market strategist at Jeffre and a CNBC contributor and Matt Powers is managing partner at P advisory group. Gentlemen, it's great to have you all here. David Zeros, I'm going to start with you.Um because as goes oil and energy prices, so goes the rest of the market right now and it seems to be driving Fed policy, too. Your thoughts. Well, M ...

Market Overview - The S&P 500 has experienced its third consecutive week of losses, but stocks are showing signs of recovery at the start of the new week [1] - Current market valuations are considered relatively expensive, leading to a cautious outlook [2] - The market has only pulled back 5% from its peak, transitioning from an upward trend to a sideways and now downward movement due to geopolitical tensions and weak economic indicators [3] Risks Identified - The primary risk is related to private credit exposure, which remains uncertain and could negatively impact the broader market [4] - Rising oil prices pose an inflationary risk that could undermine the benefits of recent fiscal stimulus measures [6] - The Federal Reserve's limited ability to cut interest rates in response to soft macroeconomic data exacerbates the situation [6] Market Predictions - Historically, midterm election years see a market pullback of around 15%, but the current stimulus may cushion potential declines [8] - A further market sell-off of 10-15% could occur if the Iran conflict persists without resolution [9] - The consensus earnings forecast for the S&P 500 in 2026 is approximately $35 per share, with current trading at about 22 times that figure [10] Investment Strategy - The focus is on high-quality companies with secular growth stories, particularly those leveraging artificial intelligence to improve operational efficiency [15] - Companies like Wesco and Ferguson in distribution, as well as Comcast and Airbnb, are highlighted as potential investment opportunities [16] - A defensive investment posture is maintained, with a preference for sectors like energy, staples, and utilities, while also considering cyclical value sectors if the market declines further [21] Economic Indicators - Oil prices have fluctuated around $95 per barrel, with potential implications for consumer spending and inflation if prices remain high [22] - The expected stimulus from tax refunds may be offset by rising gas prices, which could diminish the anticipated economic benefits [25] - The Federal Reserve is expected to maintain its current policy stance, with no immediate surprises anticipated in their upcoming communications [26]

We're in this era of the internet where uh this is always surrounded by it and I don't blame anyone for not knowing what to do with it and this is just what I have done with it and um yeah I wrote a little turning negativity into productivity but that's also potential delusion right oh yeah about me. Um, I hesitate to talk about myself every time I'm on stage because I uh I'm about to sing songs that I've written about myself and I feel like that's too much on me already. But yeah, I'm a musician.Uh, which ...

Core Insights - Japanese stocks and the iShares MSCI Japan ETF are expected to continue their strong performance into 2026, supported by the "Takaichi Trade" and a favorable political environment [1][2] Investment Opportunities - The iShares MSCI Japan ETF, with a market capitalization of $18.3 billion, is one of the oldest and most accessible single-country ETFs, tracking the MSCI Japan index [4] - The ETF has shown a positive price change of 0.51%, currently priced at $93.85, with a 52-week range of $57.68 to $94.28 [8][9] Political Environment - Prime Minister Sanae Takaichi's popularity and decisive policies are viewed positively by both voters and investors, contributing to a favorable investment climate in Japan [6][7] - Takaichi's proposed massive stimulus aimed at supporting technology and driving inflation is seen as a strategic move to enhance wage growth and domestic tech investment [9] Shareholder Returns - The MSCI Japan index has seen a significant increase in dividend payout expectations, rising by 38% over the past five years, indicating a shift towards better shareholder rewards [11] - The iShares ETF boasts a trailing-12-month dividend yield of 4.22%, reflecting the improving return on equity (ROE) of Japanese companies [10][11] - Share buybacks by MSCI Japan index member firms have accelerated over the past two years, further enhancing the attractiveness of the ETF [12]

Watch out for sneaky stimulus https://t.co/NgtOIO9sZP ...

Group 1 - The recent spike in gold and silver prices was characterized by a rapid increase, leading to a parabolic market behavior typical of late bull markets, attracting new buyers motivated by fear of missing out [1] - Gold and silver entered overbought territory, resulting in a significant drop of 15% for gold and 38% for silver within a 24-hour period, wiping out over $15 trillion from these markets, which is equivalent to half the GDP of the United States [2] - The drastic decline in prices was described as a "GOLD AND SILVER BLACK SWAN" event, highlighting the volatility and risk associated with these assets, even when perceived as safe [2][3] Group 2 - The Federal Reserve's narrative shifted with the nomination of Kevin Warsh as a potential successor to Jerome Powell, indicating a change in monetary policy direction [4][5] - Warsh is known for advocating a smaller Federal Reserve footprint and a stricter approach to inflation, which could impact the attractiveness of gold and silver as hedges against easy monetary policy [6][7] - The long-standing belief that central banks would continue to provide stimulus and support markets may be challenged by Warsh's historical stance on monetary policy, suggesting a potential shift in market dynamics for precious metals [7]

Market Outlook & Potential Risks - The market anticipates further stimulus, but a "hawkish cut" by the Federal Reserve, signaling a potential end to rate cuts, could disappoint investors and compress market gains [1][2] - Mega-cap stocks may not experience significant further gains, potentially leading to market consolidation [2][3] - A hawkish Fed message, indicating a pause until the next Fed president is in office (February), could benefit mid and small-cap stocks while the MAG7 stocks may underperform [4] - Historical trends suggest that after three consecutive years of 10% S&P returns, the median return is only 25%, raising concerns about potential consolidation or pullback [5] 2026 Forecast & Volatility - The firm's 2026 S&P price target is 7,150, representing approximately a 4% increase from the previous day's close [5] - Technical and fundamental analysis suggests higher volatility in 2026, with strength in the first half followed by a drawdown in the third quarter before midterm elections [8] - The firm anticipates mid-single-digit returns for 2026, requiring a recalibration of market expectations [8] - A potential 20% pullback is expected around Q2 or Q3, driven by midterm elections [9][10] - The potential loss of the House or Senate by the current administration could trigger the drawdown, while subsequent Fed cuts could catalyze a market recovery [10][11]

US-China Trade Dynamics - Chinese companies still rely on the American market, despite double-digit falls in exports to the US over the past eight months [2][3] - China's exports to the US are being rerouted through third countries like Vietnam, Thailand, Malaysia, Philippines, Indonesia, and Mexico [3] - If Chinese companies completely lost access to the American market, their profits would significantly decrease [4] China's Economic Strategy - China is diversifying its trade relationships, indicating that the US is not the only market for Chinese goods [4] - The primary focus is on the weakness of Chinese domestic demand and the country's increasing ability to meet its own needs domestically [5] - The Politburo has decided to prioritize boosting domestic demand in 2026 [6] Stimulus and Import Reliance - The expected stimulus is not very large, limiting its impact [8] - Chinese companies are increasingly capable of filling domestic demand gaps, reducing reliance on imports [8][9] - China is less reliant on imports than ever before, diminishing the flow-through effects of domestic rebalancing to foreign countries compared to the 2008 stimulus [9][10]

Market Sentiment & Investment Strategy - Goldman Sachs is recommending buying the dips in the markets, suggesting a potentially favorable investment opportunity [1] - Investors are cautiously "nibbling around the edges" rather than aggressively buying the dip, indicating some hesitancy [3] - The expectation is that the Fed will intervene to support the stock market if it declines too much [3][4][5] Macroeconomic Factors - The Fed is potentially cutting interest rates, with no discussion of hiking them [1][16] - Unemployment numbers are around 4% [2] - The federal government is expected to run a $18 billion to $19 billion trillion deficit over the next several years, which could positively impact the stock market [2] Consumer Spending & Retail Performance - The National Retail Federation expects consumers to spend over $1 trillion this holiday season [10] - The high-income consumer is primarily driving the economy, while the low-income consumer remains under pressure [11][12] - There are mixed reads on consumer behavior, with some retailers like Gap and TJ Maxx performing well, while others like Home Depot showed less positive results [7][8] Technology & AI - A strong AI capex narrative is crucial for maintaining market confidence [12][13] - Persistent growth and demand are expected for technology products, even in an economic downturn [14] - Nvidia's performance is a significant barometer for the market, while Dell is considered less so [15] Federal Reserve (The Fed) - The Fed's statements on interest rates and potential rate cuts are crucial drivers for the market [16] - The Fed is potentially more concerned about cracks in private sectors than the stock market or employment [16]

Market Trends - Bitcoin fell following Japan's new $135 billion stimulus package [1] - The stimulus sent the yen to 10-month lows [1] - Markets are anticipating potential Bank of Japan rate hikes [1] - Global risk-off moves are expected [1]