The anticipated Fed rate cut is on for this week….will they welcome Santa or give him a slap to his beard for being creepy. My best guess is that the Fed will welcome Santa and provide the fuel for a Santa Claus rally toward the year end. Why not keep the game going for a few more weeks. Then when 2026 gets ushered in hell can arrive.
If I sound a little cynical, you are reading me right. I am indeed cynical about valuations that require almost 45 years growth at 2% to be warranted. YES, that is the math. Factually, Gold has out performed the S&P in 2025 and that seems likely to continue especially if we get even a modest dump of stocks.
This time IS different but in a way that remains quiet or perhaps even unseen. The tendency over many years has been that Boomers participate in markets using ETFs and Index funds often still within 401K vehicles in the hands of 3rd parties. This passive index fund approach buys EVERYTHING not just the mag 7 and when it gets sold EVERYTHING gets sold. A rush to the exit will by nature of passive investing, dump ALL stocks and disproportionately the big tech mag 7…yes, it can happen here. And I believe it will and that the high flying NASDAQ will take a poop in all that pristine white snow.
So when will the market dump? I'd lie if I said I knew, but I can say IT WILL. Interest rate cuts might bring a temporary sense that all is well and the Fed is on top of things bolstering the economy in a ST. Nick of time. Not so fast. Per the numbers they are actually behind the curve so in that particular way Trump has been on the right side of it…maybe not 1% rates as demanded but lower rates will or should keep the economy on life support. BUT, isn't that inflationary? Yes it is. So in a way, the medicine will kill the economy for those who are already suffering in it putting them out of their misery so to speak…you know, the “K” shaped economy where the top is thriving because assets are rising but the bottom is buying Spam as a holiday treat. It is a wild ride worthy of a Disney waiting line…actually worse, Six Flags.
I do wish you all a very Merry Christmas. Life is influenced by many factors most outside of our control. But in our homes under our roofs, we are the big influence. Love each other and Celebrate Christ's birth. Try to get ahead of things for 2026, buy some more metals, keep a little extra cash or junk silver around and be prepared for Santa to leave behind a big turd on his way back up the chimney.
Best,
Donn Marier
DM-Your Own CFO