Investors and traders had another turbulent week, as the indexes all finished just above flatline. Lingering concerns about the shaky artificial intelligence sector, stubborn inflation and the up-dated labor data have weighed heavily on the market, as many cautious investors head to the sidelines. “We’ve been in a choppy period for a while now,” said Zackery Hill, head of portfolio management at Horizon Investments. “With the S&P 500 basically flat [this week], it’s much ado about nothing,” he added. The historic ‘Santa Claus Rally’ which takes place the last 5 market days of the year and the first 2 days of the new year, has yet to materialize. Will Santa bless the market or be a ‘no show, like last year? Many investors are becoming disenchanted with high tech and developing artificial intelligence sectors as the skyrocketing of stock prices have driven them to more reasonable sectors such as financials, materials, and industrials, as these have out gained the market and given investors and traders ‘peace-of-mind.’ As Mr. Hill noted; “I think everyone’s ready to be done with 2025.”
Monday’s market opened up, with all three indexes positive. The little mentioned Russell 2000 index, consisting of smaller value and growth stocks, led all three major indexes up 1.2%, as much pivoting drove it higher. The GDP, fresh out early Tuesday, stated that the economy had grown at an annual pace of 4.3% the previous 3 months, well above what the Wall Street Journal and economists had projected to be 3.2%. The past 3 months were well above what pollsters had predicted. According to the Bureau of Economic Analysis consumer spending was up considerably, reaffirming the GDP report, as the biggest growth driver. Economists were concerned that the struggling labor market would off-set the effects of the upswing of consumer spending. This positive news gave investors reassurances that the economy was in fact on a growth track, with labor data not a negative factor. The prospects of a ‘Santa’ visit are now very positive, as the latest S&P 500 record illustrates a market moving upward. All three indexes finished higher Tuesday. Wednesday’s shortened day saw the indexes again gain ground as the blue-chip Dow Jones Industrial Average added 300 points, while the S&P 500 continued to surge to yet another record close. The Nasdaq closed just above flatline, up 0.2%.
The Shiny Metals continue to stun the market… with Silver, Gold and Platinum racking up record gains. Current prices are at record highs with Gold up 70% at $4,502 a troy ounce, Silver has doubled to $71.64 a troy ounce and Platinum has doubled to $2,247 a troy ounce, with all three metals leading all sectors of the market. All three metals are in heavy demand, as investors seek to secure safer havens and portfolio balancing. Investment risks in the artificial intelligence sector and cryptocurrency markets have driven market players to more proven sanctuaries, that of precious metals of gold, silver and platinum. “We see no reason for gold to change its vector until sound monetary policies are introduced by the global central banking community,” said Shree Kargutkar, a senior portfolio manager at Sprott Asset Management, speaking to Yahoo Finance. Heavy industrial usage, plus shortages due to production and tariffs have helped keep the precious metals in strong demand. As the year ends, “Gold, Silver and Platinum look to be the defining trades of the year.”
RUMBLINGS ON THE STREET
Shree Kargutker, senior portfolio manager at Sprott Asset Management, Yahoo Finance – “In the new paradigm, gold is being viewed as a currency rather than a commodity.”
Raccardo Trezzi, a former Federal Reserve economist who runs an economic consulting firm in Geneva, commenting on inflation, WSJ – “The data will become progressively more reliable going forward, but we need to wait six months,” said Trezzi.
Chad McComic, Owner of GM Christmas Tree Farm in West Point Mississippi, WSJ – “Sales were up, sales were down, sales were steady. But as a general conception of what I saw there, sales were down this year.”
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