To The Moon

My first post of Year 2025 and I am a harbinger of “not so good” news. Dear oh dear !

Wall Street lost ground on the last trading day of 2024 - Tues, 31 Dec 2024, closing the book on a remarkable year for equities.

Twin factors that have been powered US market to record highs are (a) artificial-intelligence (AI) boom and (b) US Fed's first, interest rate cuts in 3½ years.

On Wall Street, major US stock indexes ended Tuesday’s session in the red, after oscillating between small gains and losses early in the session, ending a languid, low-volume session that contrasted with the tumultuous year that preceded it.

When 4pm came a knocking: (see above)

• DJIA: -0.07% (-29.51 to 42,544.22).

• S&P 500: -0.43% (-25.31 to 5,881.63).

• Nasdaq: -0.90% (-175.99 to 19,310.79).

Treasury yields and Inflation worries, remained the two most-oft quoted catalysts for market weak performance.

Treasury Yields.

Bond yields have risen based on (a) US Fed's recent economic forecast and (b) worries that returning President Trump's policies that includes tariffs, may prove inflationary.

The benchmark 10-year US Treasury note reached its highest level since May 2 at 4.641% last week, “helping” to cool the rally, as it managed to attract funds to flow out of equities market.

Latest yield closing on 31 Dec 2024 was 4.573%, a shade lighter than its peak, nonetheless still elevated.

Inflation Worries.

The Fed has “failed” in its bid to bring core inflation down to the ideal 2% rate, despite 3 interest cuts amounting to -1.0%, since September 2024.

In recent months, inflation remained stubbornly sticky. (see below)

• November 2024 - headline PCE was 2.4%.

• November 2024 - core PCE was 2.8%.

All the while, juggling a balancing act to ensure weekly jobless claims, US jobs and unemployment, stays within an “acceptable” range.

2025 Interest Cut.

During FOMC’s 18 Dec 2024 press conference, Fed chair Mr Powell had already “socialized” that there will be fewer interest cuts in 2025.

According to CME FedWatch tool, 90% of market expects the Fed to keep interest rates unchanged at their first meeting on Jan 28-29. (see above)

The potential for the first cut won't come until March 2025, according to the data.

What To Invest.

To ensure investors start 2025 on a right footing, one possible option is to look at 2024 to find out the Top 10 most favourites. (see below)

Looking back, retail investors stuck with tried-and-true large-cap tech names.

These stocks helped raked in (a) big profits and (b) promised advances in artificial intelligence (AI).

Six corporate tickers with the most retail investor inflows were a who's who of tech momentum trades.

This includes:

• $Advanced Micro Devices(AMD)$.

• $NVIDIA(NVDA)$.

• $Apple(AAPL)$.

• $Palantir Technologies Inc.(PLTR)$.

• $Tesla Motors(TSLA)$.

• $Amazon(AMZN)$.

• The 6 stocks collectively pulled in $67.7 billion in total retail inflows in 2024.

• Nvidia has overtaken Tesla as the most popular stock among retail investors, judging by inflows.

In summary, 2025's investment sweet spots : (1) Mega-cap stocks. (2) Tech stocks. (3) Biz with AI advantage. Anything else ? Happy 2025 investing ! (remember your due diligence !)

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

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• Do you think the Fed will only start to cut interest rate in March 2025 ?

• Do you think the yahoo finance post got the 6 stocks “ripe” for investment in 2025 ?

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