Author Archive

• Morning News: December 18, 2025
  Eddy Elfenbein, December 18th, 2025 at 7:04 am

  The US Is Giving Its Enemies What They Want

  Want to Make America Great Again? Try Copying China

  China Is Feeling Strong and Senses an American Retreat

  All That Cheap Chinese Stuff Is Now Europe’s Problem

  The Supreme Court Generals Failed Their Troops This Year

  Washington Should Make Growth the Driver of Affordability

  America Is Forgetting What Capitalism Is

  Trump Announces Military ‘Warrior Dividend’ Amid Inflation Woes

  US Approves $11 Billion Arms Sale to Taiwan, Drawing China’s Ire

  Nasdaq Sees Bigger Year Ahead for Listings on Billion-Dollar-Plus IPOs

  How AI Borrowing Could Emerge as a Problem for the Fed

  US Fed Terminates Citi Notices that Demanded Bank Improve Risk Controls

  Bessent’s 2025 Saw Powell and Argentina Rescues, Deficit Angst

  UBS Plans January Job Cuts to Kick Off Final Year of Integration

  Bank of England Cuts Rates to Near Three-Year Low

  Tricolor’s Excel Guy Failed to Fix Numbers in Alleged Fraud

  Apollo Expands Asset-Level Risk Reviews to Reflect Impact of Extreme Weather

  Israel Approves $37 Billion Deal to Deliver Gas to Egypt

  How BP’s New Boss Became the Most Powerful Woman in Fossil Fuels

  World-Beating 55,000% Surge in India AI Stock Fuels Bubble Fears

  OpenAI Inks Deals With Colleges, Seizing Early Lead in Education Market

  More Math, Not Less, Will Lead Students to Succeed

  How China Built Its ‘Manhattan Project’ to Rival the West in AI Chips

  Micron’s Blowout Results Are Bad News for Anyone Buying a New Phone or PC Next Year

  Tesla’s ‘Musk Premium’ in Focus With SpaceX IPO on the Horizon

  Tesla Drivers Are Buying Escape Tools and Cars to Avoid Getting Trapped Inside

  One Generic Cancer Drug Costs $35. Or $134. Or $13,000.

  Moderna Gets Funding for Bird Flu Shot After HHS Ends Contract

  How the Shiny, Viral Hulken Bag Became a $50 Million Brand

  Watch Out, Oscars. Here Come the TikTok Awards

  How the ‘Wicked’ Movies Turbocharged a Broadway Juggernaut

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• Morning News: December 17, 2025
  Eddy Elfenbein, December 17th, 2025 at 7:02 am

  US Readies New Russia Sanctions If Putin Rejects Peace Deal

  Trump Orders Blockade of Sanctioned Oil Tankers in Venezuela

  Venezuela’s Long Oil-Output Slump Dulls Market Hit of Trump Blockade

  Trump US Vowed Energy Dominance. Here’s How He’s Doing

  Trump Targets Defense Giants’ Shareholder Payouts as Cost Overruns Mount

  Why Investors Are Worried About Japan’s Bond Market

  U.S. Threatens Penalties Against European Tech Firms Amid Regulatory Fight

  European Governments Must Listen to Jamie Dimon and Bill Gates

  Inflationary Pressures Appear Contained, Bank of Canada’s Macklem Says

  Turning the Monroe Doctrine Into Donroe Is Awful Geopolitics

  Donald Trump May Be About to Pick the Least Important Fed Chair in Decades

  Next Fed Chair in ‘No-Win Scenario’ as Selection Process Draws to a Close

  Dow Transports Are Stock-Market Leaders Now. Here’s What That Means for Investors

  What Trump’s Embrace of Crypto Has Unleashed

  Gold Forecast to Glitter Again Next Year Despite Biggest Gain Since 1979

  K-Shaped US Economy Leaves Small Businesses Playing Catch-Up

  The Affordability Crisis Is Real and Tariffs Caused It

  Spooked by AI and Layoffs, White-Collar Workers See Their Security Slip Away

  Heating Costs Expected to Rise 9.2% This Winter

  Trump Dangles Cash Payments to Buoy Voters’ Views of the Economy

  A New Way to Understand America’s Congressional Doom Loop

  The Squishy Number Behind the Rise and Fall of Oracle’s Stock

  Suing Software Will In No Way Add to Housing Supply

  Warner Rejects Paramount’s Hostile Bid, Saying Netflix Deal Still Superior

  Jared Kushner’s Firm Pulls Out of Bid for Warner Bros. Discovery

  Why Are Conservatives So Afraid of Netflix Buying Warner Brothers?

  Podcasters Love YouTube. That’s Making Podcast Advertising Less Predictable.

  OpenAI in Talks to Raise $10 Billion From Amazon, Use Its Chips

  The Women of OpenAI’s C-Suite Are Sending a Message

  A Rocket Maker Burned Through Its Cash, Then Eric Schmidt Swooped In

  Does China Have a Robot Bubble?

  On British Roads, Chinese Cars Are Racing Ahead

  Tesla’s Rally to Record High Is Leaving Big Tech Peers Behind

  California Gives Tesla 90 Days to Change Autopilot Advertising

  Cancer Doctors Are Making a Fortune Off Drug-Trial Participants

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• CWS Market Review – December 16, 2025
  Eddy Elfenbein, December 16th, 2025 at 5:54 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Circle your calendars for Friday, December 26. That’s when I’ll send you the Buy List portfolio changes for 2026.

  As usual, I’ll add five new names to the Buy List, and I’ll delete five current ones. The Buy List stays at 25 stocks. The new Buy List goes into effect on January 2 which will be the first day of trading of the new year.

  Once the changes are made, the Buy List is locked and sealed, and I can’t make any changes for the next 12 months. I like to release the portfolio changes a few days early just in case someone claims I’m somehow manipulating the numbers.

  Our Buy List has been live on the Internet every hour of every day for the last 20 years. Thanks to everyone who’s been a supporter of high-quality, low-turnover investing.

  Now let’s look at our long-delayed jobs report. This morning, the Labor Department finally released the jobs report. The good news is that last month, the U.S. economy gained 64,000 jobs which topped Wall Street’s forecast of a gain of 45,000.

  Here’s a look at nonfarm payrolls:

  

  The bad news is that the unemployment rate rose to 4.6% which is the highest in four years. This appears to be more evidence of the “low hire, low fire” jobs market.

  The real surprise is that in October, the economy shed 105,000 jobs. For September, there was a surprise increase of 108,000. The broader U-6 rate increased to 8.7% which is the highest since August 2021.

  The government shutdown heavily impacted the numbers, and the effect may continue for a few months. During October, the number of government jobs fell by 162,000. During November, it continued to fall by 6,000.

  The report also had revisions to previous months. For example, the jobs total for August was revised downward by 22,000 to show a loss of 26,000. For September, the number of jobs was revised lower by 11,000.

  Here’s a look at some of the details from the report:

  The establishment numbers showed most of the gains in November came from a familiar source — health care added 46,000 jobs, accounting for more than 70% of the total net increase. Construction rose by 28,000, while social assistance contributed 18,000.

  On the downside, transportation and warehousing was off 18,000, part of a continuing trend in job losses for the sector. Leisure and hospitality also posted a loss of 12,000.

  “The U.S. economy is in a jobs recession,” said Heather Long, chief economist at Navy Federal Credit Union. “The nation has added a mere 100,000 in the past six months. The bulk of those jobs were in healthcare, an industry that is almost always hiring due to America’s aging population.”

  If I had to guess, I don’t think today’s release will have much sway over the Federal Reserve. However, the next jobs report, due to come out in early January, could be very important to the Fed.

  After lowering interest rates at the last three meetings, the Fed will probably take a rest at the January meeting. Traders currently think there’s only a 24% chance that the Fed will cut rates again next month. After that, traders see two 0.25% cuts coming next year.

  The other key input in this equation is average hourly earnings. Last month, average hourly earnings rose by only 0.1%. Frankly, that’s pretty weak. Wall Street had been expecting a gain of 0.3%. Over the last year, average hourly earnings were up by 3.5%. That’s the slowest annual gain in four years. If inflation is a problem, then I doubt it’s coming from the labor market.

  According to the data, household employment increased by 407,000 over the last two months. At the same time, the labor force increased by 323,000. The labor force participation rate increased to 62.5%.

  We also got the retail sales report. For September, retail sales were flat. Wall Street had been expecting a gain of 0.1%. If we don’t count autos, then retail increased by 0.4%. That beat Wall Street’s estimates of 0.2%.

  In other economic news Tuesday, the Commerce Department reported that retail sales were flat in September, against a forecast for a 0.1% increase, according to numbers adjusted for seasonality but not inflation. Excluding autos, however, sales increased 0.4% which doubled Wall Street’s estimate of 0.2%.

  Last Wednesday, the Fed voted to cut interest rates and the stock market rallied. The S&P 500 rallied again on Thursday to reach a new all-time high. It was the first time the index closed above 6,900. Since the market’s low in April, the S&P 500 has added nearly 40%.

  What’s important to understand is that the nature of the rally has gradually changed. Before, only a small group of stocks were doing the heavy lifting. Now, more stocks are joining in.

  For example, since late October, financial stocks have been leading the market. That sector hasn’t done much of anything for the last 15 years. Healthcare stocks have been a train wreck for the last three years, but now they’re showing some strength.

  Consumer staples have also edged up some in recent weeks. Industrial stocks have been gaining as well. In fact, the Dow Jones Industrials are outpacing the S&P 500. For the seven years prior to September, the Dow badly lagged the S&P 500.

  The stock market has fallen for the last three days in a row. Today the index briefly fell below its 50-day moving average.

  What’s happening is that Wall Street has adopted a more conservative outlook. That means that some of the boring sectors are suddenly in favor again. Since late October, the S&P 500 has been basically flat, but the S&P 500 Tech Index has fallen by more than 5%.

  This trend is an outcome of lower interest rates from the Fed. As rates drop, investors desire stable stocks with stable dividends.

  Last week, Abbott Labs (ABT), one of our Buy List stocks, announced that it’s raising its quarterly dividend from 59 to 63 cents per share. That’s an increase of 6.8%. What makes this notable is that this is the 54th year in a row that Abbott has increased its dividend. There aren’t many stocks with a streak like that. Abbott has been on our Buy List for the last five years.

  Too many investors tend to overlook dividends, but they’re a key part of long-term investing success. Since 2020, Abbott has increased its dividend by 70%. The new dividend is payable on February 13 to shareholders of record on January 15.

  Abbott is also a good example of the kind of stock that’s been leading the market in recent days (+5% to -1%).

  Here’s a 42-year chart of Abbott Labs with its dividends reinvested (black) and without dividends (blue). Those little payments really do add up.

  

  That’s all for now. The CPI report is due out tomorrow. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

• Morning News: December 16, 2025
  Eddy Elfenbein, December 16th, 2025 at 7:04 am

  America Needs to Come Around to the Idea There’s No ‘Winning’ Against China

  Saudi Sisters Wielding $50 Billion Connect Wall Street to Riyadh

  The Suez Canal Reopening Is a 2026 Gift for Commodities

  India’s Power Plan Skips Gas to Double Down on Coal

  Cold, Green Europe: What Happens When Ideology Trumps Physics

  EU Backtracks on Electric Vehicles

  Volkswagen to End Production at German Plant, a First in Company History

  Ford Will Take $19.5 Billion Hit as It Rolls Back E.V. Plans

  Can U.S. Automakers Compete With Chinese EVs While Focusing on Gas Guzzlers?

  Why Everyone Got Trump’s Tariffs Wrong

  Jobs Data Is Finally Back. But the Economic Picture Is Still Blurry.

  The Federal Deficit Is Shrinking. Can That Last?

  Kevin Hassett Says He Would Be Independent at the Fed. Some Who Know Him Worry.

  Why Kevin Warsh is Newly Ascendant in the Fed Chair Contest

  Atlanta Fed Says It Will Seek New Head with ‘Meaningful Ties’ to the Southeastern District

  Ray Dalio’s Debt Alarmism Is Belied by His Genius As An Investor

  Wall Street Sees Rare Earnings Growth Supporting S&P’s Bull Case

  New Trump Order Reining in Proxy Advisers Could Weaken Shareholder Rights

  US Overdraft Fees Jump at Big Banks Amid Regulatory, Economic Shifts

  Wealth Managers Merge at Rapid Pace and PwC Sees Even More Ahead

  Kalshi and Other Prediction Markets Should Scare Sports Leagues

  Oracle’s $248 Billion Rent is Another AI ‘Bombshell’

  How Tech’s Biggest Companies Are Offloading the Risks of the A.I. Boom

  Senators Investigate Role of A.I. Data Centers in Rising Electricity Costs

  AI Won’t End Marketing, It Will Elevate It To Its Full Potential

  North Korea’s Hidden Remote IT Scheme

  Musk’s Fortune Soars Above $600 Billion on New SpaceX Valuation

  Kraft Heinz Picks New CEO Ahead of Split

  Fast-Casual Chains Should Pivot to Smaller, Cheaper Meals in 2026

  Trump Sues BBC for $10 Billion Over Documentary Edit

  How Rob Reiner Helped TV Grow Up

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• Morning News: December 15, 2025
  Eddy Elfenbein, December 15th, 2025 at 7:14 am

  China Nears First Investment Decline in 3 Decades After Sharp Monthly Drop

  Old Meets New Economy: AI Boom to Supercharge European Banks’ Rally

  Sweden’s Big Banks Join Government Drive to Tackle Hybrid Threat

  The US Is Now All-In for European Nationalism

  How Elon Musk’s Latest DOGE Regrets Add Insult to Incredible Injury

  Trump’s Promised Big Tax Tax Cuts Are Expected to Disappoint the Average Worker

  Reduce the Taxes That Raise the Cost of Owning a Home

  Trump’s Cuts to U.S. Labor Board Leave Festering Disputes and a Power Struggle

  The S.E.C. Was Tough on Crypto. It Pulled Back After Trump Returned to Office.

  Donald and Melania Trump’s Terrible, Tacky, Seemingly Legal Memecoin Adventure

  Literal Teens Are Losing It All at Crypto Casinos

  Can the Fed Do What Economists Think It Can?

  Call Me a Heretic, But I Don’t Buy the Fed Religion

  The Bond Market Will Not Be Fooled

  Fannie, Freddie Quietly Add Billions to Mortgage-Bond Portfolios

  Private Credit Is Poised For Disruption by Blockchain

  JPMorgan Sees UBS Compromise Cutting CET1 Need to $400 Million

  Is the Pioneer of Private Equity’s Hottest Trade Learning to Let Go?

  McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry

  How the US Freight Rail Industry Got Dirtier Than Coal Power Plants

  China Brings EV Price War to Thailand, Dangling 38% Discounts

  SpaceX Starts a Wall Street Bake-Off to Hire Banks for Possible IPO

  CEOs to Keep Spending on AI, Despite Spotty Returns

  Netflix CEOs Make Their Case for Warner Bros. Acquisition

  How Will Hollywood Contend With AI Without Destroying Itself?

  Roomba Maker Declares Bankruptcy, but Tries to Ease ‘Bricking’ Fears

  He’s the Godfather of Modern Robotics. He Says the Field Has Lost Its Way.

  Bondi, and Australia, Get Swept Into a Violent World

  Brown University, Reeling From Shooting, Sends Students Home

  Bulletproof Cars See $660 Million Boom in Brazil After Robberies Stoke Fear

  Tonka Trucks Gambled on Keeping Production in China and Survived—Barely

  The Cult of Kohl’s Cash

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• Morning News: December 12, 2025
  Eddy Elfenbein, December 12th, 2025 at 7:03 am

  Historic Shift Underway in China’s Economy as Investment Slump Deepens

  If the Chinese Are Producing, the World Is Growing

  From Chips to Security, China Is Getting Much of What It Wants From the U.S.

  Why Trump’s China Chip Call Might Not Work Out

  Trump Says His Economy Deserves an ‘A+++++’ — But His Own Voters Disagree

  To Enhance Affordability, Trump Must Team With Rand Paul, Thomas Massie

  In the Face of Abundant Disdain, Meredith Whitney Asked Why

  ECB Unlikely to Follow Fed For Now, But Currency Moves May Yet Prove Decisive

  Fed Board Votes Unanimously to Reappoint Reserve Bank Presidents

  Deutsche Bank, Goldman See Fed Cuts Rekindling Dollar’s Slide

  Bessent Accelerates Regulation Overhaul to Jumpstart Growth

  Wells Fargo Hiring Spree Fuels Investment Banking Ambitions

  Prospect of UBS Capital Compromise Sends Stock to 17-Year High

  How Resilient Will the US Consumer Be Without a Job?

  Tech Support Scammers Stole $85,000 From Him. His Bank Declined to Refund Him

  Companies Are Desperately Seeking ‘Storytellers’

  Making Lululemon Cool Again Will Be a Stretch

  Crumbl’s Cookie Empire Is Showing Cracks

  Arkansas Public Television Drops PBS

  Disney to Invest $1 Billion in OpenAI and License Characters for Use in ChatGPT, Sora

  Behind the Deal That Took Disney From AI Skeptic to OpenAI Investor

  Microsoft’s Mustafa Suleyman: ‘AI Is Already Superhuman’

  AI Is Powering Trump’s Economy, But American Voters Are Getting Worried

  Why Oracle Is Worrying Investors About the A.I. Boom

  Warner Bros. Bidders Are Having a Rough Time

  Paramount Says Money Is No Object. Warner Bros. Isn’t Convinced.

  Broadcom Shares Sink Despite Record Revenue

  Rivian Expands Hands-Free Driving in AI Push

  Boat Strikes Aren’t Doing the US Military Any Favors

  Golden Dome: The Astronomical Cost of Defeating ‘Any Foreign Aerial Attack’

  The Wildcatter and Trump: An Unusual Duo Reshapes U.S. Energy

  The Cold War on Oil Tankers Heats Up

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• Morning News: December 11, 2025
  Eddy Elfenbein, December 11th, 2025 at 7:07 am

  Trump Doesn’t Want to Talk About Affordability. Democrats Say That’s a Gift

  Why the ‘Affordability Hoax’ Is a Trap for Trump

  Affordability Isn’t a Hoax. It’s Not a Crisis for Most, Either

  Trump’s Tariffs Represent An Attempt to Achieve the Impossible

  Fed’s Fractured Vote Signals Trouble Ahead for Future Rate Cuts

  If That Was a Hawkish Cut, Doves Needn’t Worry

  Fed Cuts Or Not, The Stock Market Is Likely To Move Higher In 2026

  Fed Chair Jerome Powell Says U.S. May Be Drastically Overstating Jobs Numbers

  ECB Unlikely to Follow Fed For Now, But Currency Moves May Yet Prove Decisive

  Brazil’s Central Bank Holds Its Key Rate at Lofty 15%

  Bank of Canada Attempts to Temper Excitement About Economy

  Mexico Approves Up to 50% Tariffs on China, Other Asian Nations

  Nine Large US Banks Engaged in Debanking Practices, OCC Says

  Buffett Set to Hand Berkshire Baton to Abel, Who Has a Tough Act to Follow

  BlackRock’s Crew of Quant PhDs Are On Track for a Record Year

  Americans Grasped the Absurdity of Social Security, and Worked Around It

  Reckoning with the ‘New Normal’

  The Military Suppliers Cashing In on Trump’s Immigration Raids

  IEA Forecasts Smaller Oil Surplus as OPEC+ Output Declines

  The World Needs a Lot More Copper. But Will There Be Enough Supply?

  Trove of Critical Minerals Uncovered in the Utah Desert

  Hatching the Automobile’s Future in a Cloistered Los Angeles Lab

  The Boom in US Power Demand Isn’t Just About AI

  Oracle Is Having Its Own ‘Code Red’ AI Moment

  Oracle Shares Tumble as AI Spending Outruns Returns

  Google CEO Says We’re All Going to Have to Suffer Through It as AI Puts Society Through the Woodchipper

  Meta’s Zuckerberg Pushes Highly Paid AI Lab to Build Moneymakers

  Bringing the Genius of Artificial Intelligence Down to Earth

  For Trump, the Warner Megadeal Talks Are All About CNN

  These Warner Bros. Deals Instill Fear and Loathing in Los Angeles

  On Your Left, Hollywood’s Fading Relevancy

  Coca-Cola Names Next CEO

  Lilly’s Experimental Shot Cuts Body Weight by 23% in Study

  Abbott Fired a Warning Shot on Baby Formula — Then Launched a Lobbying Blitz

  In Act of Boycott, Malaysia Makes Its Own ‘McDonald’s’

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• Morning News: December 10, 2025
  Eddy Elfenbein, December 10th, 2025 at 7:07 am

  Latin America Shouldn’t Be So Triggered by the New US Strategy

  I.M.F. Prods China, Gently, on Its Weak Currency

  ECB Could Raise Growth Projections, Lagarde Says

  Bond Traders Cast Doubt on Extended Fed Rate Cuts Past December

  Betting Market Fanatics Are Risking It All for Six-Figure Payouts

  Great Income Squeeze Begins as Fed Spells End to Easy Yields

  Kevin Hassett Says He Wouldn’t Bow to Pressure Over Cutting Interest Rates

  The Bank Secrecy Act Very Much Needs a Modern Fix

  Wells Fargo Expects More Job Cuts, Will Roll Out AI Gradually in 2026

  How Epstein’s Deep Ties Across Wall Street Helped Him Build Wealth and Power

  Big Tech Always Gets Its Way With This White House

  On Affordability and Consumer Costs, Trump Goes All-In on an Alternate Reality

  Why Giving Matters, Even For Trump Accounts

  Truckers Who Fail English Tests Are Pulled Off Roads in Trump Crackdown

  A Scientific Pipeline to the Nobel Prize Fueled by Immigrants

  C.E.O. Resigns in Fallout Over Massive South Korean Data Breach

  China’s DeepSeek Uses Banned Nvidia Chips for AI Model, The Information Says

  Taiwan Invokes National Security Law to Protect TSMC Trade Secrets

  Chip Company Plotted to Send Technology to China, Ex-C.E.O. Says

  SpaceX IPO Plan Puts $2.9 Trillion of Listings Back on the Table

  Mapping the Political Fallout of GOP Health-Care Cuts

  Warner Bros.’ Bidders Brace for a Fight That Will Last Months

  Lest We Forget, Blockbuster Twice Passed on Netflix

  U.S. Manufacturers Slow Orders Ahead of Supreme Court Tariff Ruling

  If Trump Tariffs Fertilizer, U.S. Lacks Reserves ‘To Meet Domestic Demand’

  A Billion-Barrel Oil Glut Is Forming at Sea

  Rare Earths Aren’t Rare for Everyone

  Silicon Valley Is Racing to Make Critical Minerals—and Blunt China’s Dominance

  Geothermal Startup Fervo Attracts New Investors Including Google

  Mining’s Underdog Becomes Big-Ticket Dealmaker

  Nuclear and Fossil Fuels Join Forces to Undermine Renewables

  Uber Pulls Back From Electric Cars, Slashing Incentives for Drivers

  Nissan’s U.S. Boss Says the Automaker Lost Its Way

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• CWS Market Review – December 9, 2025
  Eddy Elfenbein, December 9th, 2025 at 5:27 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  How much is cash worth? We’ll soon learn the answer. Paramount has launched a hostile takeover bid for Warner Bros. Discovery. Netflix already announced a deal for WBD, but that was in cash and stock. Specifically, Netflix offered $27.75 per share for WBD. That’s $23.25 per share in cash and $4.50 in stock. Paramount is offering $30. All cash.

  The details get a little tricky because WBD’s cable holdings aren’t in the Netflix deal. If those are spun off, that could be very lucrative while Paramount is trying to buy all of WBD. What I like is that Paramount is bringing its offer directly to WBD shareholders. Personally, I’d lean toward the Paramount offer.

  The S&P 500 Nears a New High But Doesn’t Quite Make It

  Through Friday, the S&P 500 rallied nine times in 10 sessions. The index got within 0.5% of a new all-time high. Then it lost its nerve and quickly backed off. The S&P 500 lost ground yesterday and today, albeit by a very modest amount.

  

  Will the market rally through to a new high? I can’t say, but if it does then the Federal Reserve would be an ideal catalyst. The Fed began its two-day meeting today. Tomorrow afternoon, the central bank will release its policy statement, and it’s widely accepted that the Fed will cut interest rates again. This would be the third cut in as many meetings.

  If the Fed cuts by 25 basis points, then it would bring the Fed’s target range for its Fed funds rate to 3.50% to 3.75%. This is the overnight lending rate that banks use between themselves. Over the last year, through September, core inflation is running at 3%. A Fed cut would lower the real interest rate, meaning adjusted for inflation, to a range of 0.50% to 0.75%. That’s low by historical standards, but there’s room to go lower.

  There could be some drama at this meeting. I’m curious what the vote will be. For the first time in many years, there may be a rift among FOMC members. Jerome Powell appears to be fine with a rate cut this week, but I sense he’s not fully onboard with another rate cut next month, while some members are.

  Even though the C in FOMC stands for committee, it’s rare to see divisions within the Fed. The Fed prefers to make its moves by consensus. Sometimes you’ll see minor dissents, but nothing too dramatic. By and large, the chair gets their way. A Fed chairman hasn’t been outvoted in over 40 years.

  But Powell is a lame duck. That may change things. Powell will be out as Fed chair in May, and Kevin Hassett is the leading candidate to be President Trump’s pick. Powell was initially appointed by President Obama. He was then elevated to Fed chair by President Trump and reappointed by President Biden.

  The FOMC meeting will conclude tomorrow, and the policy statement will be released at 2 pm ET. For the January meeting, the odds of a Fed rate cut are at just 23%. After cutting rates tomorrow, traders see the Fed taking a six-month break. With tomorrow’s decision, we’ll also get the Summary of Economic Projections, otherwise known as the dot plot. This will tell us more about the Fed’s plans for 2026 and beyond.

  The key for investors is to watch for the health of the jobs market. Remember that more workers translates to more shoppers. The Labor Department released its jobs openings report today, (ie, the JOLTS report). The report said that the number of job openings for October rose to a five-month high.

  That’s the good news. The bad news is that job openings increased a tiny bit, from 7.66 million to 7.67 million. Also, layoffs rose to 1.85 million which is the highest since early 2023. Hiring fell by 218,000.

  

  Healthcare has been the big jobs driver all year. Outside that, the numbers haven’t been that impressive. This fits the overall pattern we’ve seen: a stagnant jobs market. The reality is that consumers and businesses are struggling to deal with higher costs.

  Also, we may have to put a big asterisk on today’s numbers from the JOLTS report. The BLS said that because of the government shutdown, it had to stop using its regular methods. The next JOLTS report will be out on January 7.

  The phrase that’s been making its way around economists these days is “no hire, no fire.” In other words, the unemployment rate is still quite low by historical terms, but companies aren’t willing to hire new employees.

  Hiring has slowed down, especially for new college graduates. It’s as if the economy has hit a perfect equilibrium where businesses aren’t willing to shed staff, but they’re weighed down by costs and uncertainty so they’re not hiring either. I don’t expect this balance much longer. Soon, firings will be hard to ignore.

  Home Deport Offers Cautious Guidance

  Shares of Home Depot (HD) were weak today after the company gave disappointing guidance. I like to pay attention to what Home Depot has to say. They probably have a better understanding of consumer spending than many official government reports.

  Home Depot has struggled lately. Over the last three months, the S&P 500 is up around 5% while HD is down by 15%.

  For fiscal 2026, the home improvement store expects sales growth of 2.5% to 4.5%. That unnerved some traders. Wall Street had been expecting 4.5%.

  Home Depot also said it expects EPS growth to be flat to +4%. For comparable sales, HD sees growth of flat to +2%. Of course, a lot of this will depend on the housing market. For the current fiscal year, HD sees EPS falling by about 6%. Home Depot isn’t alone. Toll Brothers and Hovnanian both said that demand is being held back by high mortgage rates and worries about the tariffs. So much of the broader economy is closely tied to the housing market.

  On the plus side, the Russell 2000 Index of small-cap stocks hit a new high today. The Russell 2000 has lagged the market consistently for the last five years. Every prediction of a rotation to the little guys has flopped. Well, it’s happening again. The Russell 2000 has outpaced the S&P 500 for the last month. I hope this trend continues, but I won’t make any promises.

  One of the more difficult aspects of investing that’s hard to convey to a new investor is just how big the big companies are. The giant blue-chip behemoths dominate the investing world, and everyone else is running behind.

  Consider that if all 2,000 stocks in the Russell 2000 merged to form one super company, it still would be far from the largest company on Wall Street. The combined value is currently around $2.7 trillion. The Russell 2000 makes up for just 7% of the Russell 3000. The five largest companies in the S&P 500 make up slightly more than 25% of the index.

  Financial stocks have also improved in recent weeks. Goldman Sachs (GS) and Bank of New York Mellon (BK) both hit new highs today. A wider yield spread is good for the banks. Tech has also been acting better in recent days, but it’s still lagging several sectors over the last month.

  I hope you don’t mind if I brag a little about IES Holdings (IESC). I mentioned this stock to you three weeks ago, just before its earnings report. The company currently operates through four business segments: Electrical, Communications, Infrastructure and Residential. It’s been a huge winner for us this year.

  On November 21, the company reported outstanding results for its fiscal Q4, and the shares rallied 8.5%. Revenue rose 16% to $898 million. Operating income was up 39% to $104.3 million, and diluted adjusted EPS was $3.77 compared with $2.61 one year ago.

  I had already told you some of this story a few weeks ago, but the latest news is that the stock has rallied even more. The stock has closed higher for the last six days in a row. The stock reached another all-time high. IESC is up 27% since I first told you about it, and 125% since I first added it to our Buy List a year ago.

  

  That’s all for now. The Federal Reserve meeting wraps up tomorrow. The policy statement will be out on Wednesday at 2 pm ET. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

• Morning News: December 9, 2025
  Eddy Elfenbein, December 9th, 2025 at 7:02 am

  Japan Builds Up ‘Missile Archipelago’ Near Taiwan to Counter China

  Russia’s Threats Put Europe’s Borderlands on Edge

  Russia’s Oil Tanker Logjam Crushes Prices Even as Exports Surge

  China’s Manufacturing Is Booming Despite Trump’s Tariffs

  Trump Insists Tariffs Will Buoy the Economy. For Now, He’s on Damage Control.

  An Unusually Divided Fed Is Expected to Deliver a Rate Cut

  Options Traders Bracing for Wild Stock Trading Off Fed Decision

  Investors’ Bearishness Is Often Overdone — But Their Market Bubble Fears May Be Spot-On

  US Private Credit Defaults to Ease in 2026, but Fragility to Persist, Says BofA

  Peter Bauer Would Understand the Danger of Balanced Budgets

  Supreme Court Is Asked to Take Another Ax to Campaign Finance Limits

  Trump’s Handouts Put Billionaires First and Americans Last

  Trump Says U.S. Will Allow Nvidia H200 Chip Sales to China, Get 25% Cut

  How Much Could China Gain From Access to Powerful Nvidia Chips?

  Trump’s Nvidia Shift Hands Xi an Opening on Security Curbs

  Ford and Renault Team Up in Europe to Compete Against Low-Price Chinese Cars

  Federal Judge Finds Trump’s Halt on Wind Energy Is Illegal

  America’s Biggest Power Firm Pivots Hard to Its Next Era

  Four Reasons Why the Boat Strike Debate Matters for the US

  How Trump Pushed US Park Rangers to the Breaking Point—and a Union Drive

  The Ambition Gap Is Growing

  Regulators Shouldn’t Meddle With Netflix’s Warner Bros. Purchase

  Paramount Made a Hostile Bid for Warner After Netflix Deal. What Happens Next?

  Behind Paramount’s Relentless Campaign to Woo Warner Discovery and President Trump

  EssilorLuxottica Director Says Meta’s Stake in Ray-Ban Maker ‘At Least 3%’

  Apple’s Slow AI Pace Becomes a Strength as Market Grows Weary of Spending

  These Travel Influencers Don’t Want Freebies. They’re A.I.

  Same Product, Same Store, but on Instacart, Prices Might Differ

  Now Cracker Barrel Diehards Think the Food Isn’t Up to Scratch, Either

  BAT Sets Out $1.73 Billion Share Buyback, Backs 2025 Targets

  Be sure to follow me on Twitter.