Late Tuesday House Speaker Mike Johnson introduced legislation to prevent a government shutdown this weekend by extending federal funding until March 14, sending $110.4 billion to natural disaster survivors, and codifying a miscellany of policy changes. But Republicans are preparing to scrap Johnson’s plan to avert a government shutdown.
In today’s quarterly update to its projections on economic growth, inflation, and interested rates in its Dot Plot survey of sentiment, Fed officials and governors forecast fewer rate cuts for next year than in their September projections, and they saw the fight against inflation making considerably less progress in 2025. According to the median estimate, they now see the benchmark interest rate reaching a range of 3.75% to 4% by the end of 2025. That would mean just two 25 basis-point cuts. The Fed’s projections are considerably more pessimistic than investors or Wall Street economists are. A majority of economists surveyed by Bloomberg had expected the median estimate would point to three cuts next year.
Today, December 18, the Federal Reserve lowered its benchmark interest rate for a third consecutive time.The Open Market Committee voted 11-1 to cut the federal funds rate to a range of 4.25%-4.5%. Cleveland Fed President Beth Hammack voted against the action, preferring to hold rates steady.
Today’s Hot Money Moves NOW is U.S. Dollar. The dollar has been on a good run and is up 7% in the last three months, 2% in the last month. I expect this to continue with higher tariffs, and a Fed that will remain steady while other currencies are seeing more volatility. To get in on this you can buy an ETF like Invesco DB US Dollar Index (UUP), currently up 10.19% YTD with a 75 basis point expense ratio. Another option would be the WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU), up about 11% YTD with a 50 basis point expense ratio. WisdomTree buys Treasuries while Invesco uses futures but both are similarly sized ETFs and good ways to play the US dollar.
Canada is looking at imposing taxes on major commodities it exports to the United States-—including uranium, oil and potash—if the incoming Trump Administration carries out a threat to impose 25% tariffs on Canadian exports.
China’s retail sales growth unexpectedly weakened in November. Retail sales rose 3% from a year ago. That was the the slowest annual growth rate in three months and it was well below even the most bearish forecast.
Just last week Chinese policymakers elevated boosting consumption to the top priority for next year. That marked , only the second time in a decade that the consumer economy was the focus of official policy.
What you need as an investor and what your portfolio needs is a road map to the likely events of the beginning of this new administration. And a take on what those events are likely to mean for the financial markets–and the prices of stocks and bonds. And recommendations on what moves to make to respond to the events of the first 100 days of a Trump Administration. Which is what this Special Report is all about. Here /i’ll give you an investor’s calendar to the first 100 days of Trump; a run-down of the likely effects on the financial markets of the events in the first 100 days; and recommendations for moves that you should make with your portfolio.
When the Federal Reserve announces its latest interest rate move and it’s Dot Plot projections on future interest rates, inflation, and GDP growth, it will be the Dot Plot projections that matter to the financial markets.
Inflation remains stubborn. The Consumer Price Index (CPI) rose at a 2.7% annual rate in November, according to Labor Department data released Wednesday. That was hotter than a 2.6% rise in October. But that matched economists forecasts. It was also above September’s 2.4% annual rate. On a monthly basis, inflation increased 0.3% from October to November, the biggest gain since April. Prices for housing, energy, and particularly food all rose.
CPI core inflation, prices excluding volatile food and energy categories, rose another 0.3% for the fourth straight month. The are rate was up 3.3% for the year. For the past six months, core inflation has been stuck at an elevated level above the Fed’s target of 2%.
On Monday, December 9, I added Cheniere Energy (LNG) to my Special Report “10 New Stock Ideas for an Old Rally” and added it to my Jubak Picks Portfolio. Here’s what I wrote then:
Today’s Quick Pick is Cheniere Energy, (LNG). Cheniere liquifies natural gas and sells it globally. The stock is up about 32% YTD. The company is about to put seven more units of natural gas production on line, and it looks like they’ll be selling and distributing that gas, as scheduled, by the end of the year. This will mean more revenue from an actual plant producing more LNG, not the idea or a theory that more gas will maybe be put out soon. The incoming Trump Administration will be light on regulation for natural gas and there is rising demand from data centers looking to guarantee their own energy needs. I already own the stock but if I didn’t I’d certainly be adding it to my portfolio right now.
Words count. And they move stocks when they come from China’s President Xi Jinping and the Politburo ahead of the March session of parliament that will set the budget–and stimulus spending for the year. The words? The Politburo vowed to embrace a “moderately loose” monetary policy in 2025, according to the official Xinhua News Agency. That’s a huge shift from the “prudent” strategy that’s held for nearly 14 years. The last time China adopted a “moderately loose” monetary policy was in the Global Financial Crisis as part of a big stimulus package to prop up the economy.
