🔎 What to expect this week

and how analysts see things

Good morning investors! This is going to be a slow week due to the holiday.

Today we cover:

  • What to expect this week

  • Analysts are excited

  • Tax free incomes

📊 Economy and News 

Key Inflation Data and Fed Minutes in Focus Ahead of Thanksgiving

Here’s what to expect this week:

Inflation Expectations and Market Reactions
Economists forecast October PCE to rise 0.2% month-over-month and 2.3% year-over-year, with core inflation up 0.3% and 2.8%, respectively. These stickier-than-expected figures could challenge the Fed's inflation goals. Investors will watch market reactions closely during the holiday-shortened trading week, with U.S. markets closed Thursday and closing early Friday.

FOMC Meeting Minutes: What to Expect
The FOMC minutes from November will be closely watched for clues on rate cuts. Market expectations for a December rate cut have dropped from 70% to 60% over the past month. Luke O'Neill of Catalyst Dynamic Alpha Fund notes that while timing matters less, investors seek a clear path to lower rates. He predicts a "higher-for-longer" environment with a terminal rate near 3.75%. If the Fed commits to rate cuts, smaller-cap stocks could lead a market rally into 2025.

Optimistic Outlook for Stocks
Despite interest rate uncertainty, many investors remain bullish on stocks for 2025, driven by a strong U.S. economy, earnings growth, and AI sector momentum. Strategists, including Goldman Sachs and UBS, predict S&P 500 gains of 10% or more, with year-end targets between 6,400 and 6,700. Tom Hainlin of U.S. Bank Asset Management points to favorable trends in inflation, consumer spending, and Fed policy as supporting further equity growth.

Market Moves and Upcoming Data
The week ahead will feature several key reports, including:

  • Monday: Chicago Fed National Activity Index

  • Tuesday: Building Permits, Consumer Confidence, FOMC Minutes

  • Wednesday: Durable Orders, GDP, Personal Income and Spending, PCE Deflator

  • Thursday: Continuing Jobless Claims

  • Friday: Chicago PMI (November)

Given the holiday shortened week and lower market liquidity, investors will need to be prepared for potentially sharper market moves. As always, the focus will be on how inflation data and the Fed’s stance will shape the investment outlook for the remainder of the year and into 2025.

Global hits:

Costly homes: Mortgage rates are expected to stay stuck above 6% for at least the next two years, according to economists and recent forecasts.

Sad: Thousands of Americans will receive little or nothing from savings accounts that were locked during the collapse of fintech middleman Synapse. Customers believed the accounts were backed by the full faith and credit of the U.S. government.

Controversial: Over 50 major U.S. retailers, including Big Lots, Gap, Petco, Macy’s, and Nordstrom, raised interest rates on their store credit cards between September 2023 and September 2024, safeguarding their profit margins ahead of Federal Reserve rate cuts.

Sponsored by Bullseye Trades

Free Daily Trade Alerts: Expert Insights at Your Fingertips

  • Master the market in 5 minutes per day

  • Hot stock alerts sent directly to your phone

  • 150,000+ active subscribers and growing fast!

📈 Stocks

S&P 500 5,969.34 (+0.35%)
DJIA 44,296.51 (+0.97%)
NASDAQ 19,003.65 (+0.16%)
BRENT CRUDE 75.44 (+1.27%)
* Prices as of Nov 24th, 12:20 AM UTC

Key Trends Shaping Markets in 2025 and Beyond

UBS’s "Year Ahead 2025" report outlines pivotal factors influencing the global economy, including political shifts, innovation, and monetary easing. Despite recent global challenges, equity markets are up 50% over five years, with US corporate profits nearly doubling.

UBS projects the S&P 500 could reach 6,600 by the end of 2025, driven by strong US growth, AI advancements, and lower interest rates. While potential tax cuts and deregulation under a Trump administration may boost the US economy, new tariffs could pose stagflation risks.

Regionally, China’s slower growth is expected to be offset by Indian expansion, while Europe’s growth should rebound with rate cuts, particularly in Spain, the UK, and Switzerland.

Key investment opportunities include:

  • Bonds: Falling cash returns make investment-grade bonds appealing for mid-single-digit yields.

  • Stocks: US equities remain favored, alongside Asian diversification and Swiss dividend stocks.

  • Innovation: AI and renewables promise long-term profit growth.

  • Commodities: Geopolitical risks and green energy demand support gold and transition metals.

UBS sees these trends driving economic and market gains well into the late 2020s.

If you could buy one, which one would it be?

Login or Subscribe to participate in polls.

💵 Personal Finance

Incomes that are tax free - Part I

We want you to save tax money. So, let’s introduce you to some incomes that aren’t taxed (in the US).

You will find alternatives abroad. For example, one-third of the family pension, subject to the maximum of Rs. 15,000 will be exempt, if you are a widow in India. 🇮🇳 

Similar exemptions apply in other countries as well. However, for the purpose of this piece, we’ll focus on the US. 🇺🇸 

Up to $3,000 of Income Offset by Capital Losses

Selling investments at a loss can end up being slightly beneficial. Though not the same, it works in the same manner as seen in the case of Warner Bros where the loss from Batgirl helped lower taxable income significantly.

However, the amount is capped at $3,000 per year. On the plus side, you can carry over capital losses from year to year until you offset your entire loss.

Sale of a Principal Residence

This is one of our favorites because it can help you save a lot of money.

There’s a catch: you must meet the IRS's ownership and use tests, i.e.:

  • Must have owned the home for at least five years

  • Must have lived in the home as a principal residence for at least two of the last five years

Those who meet these conditions can exclude up to $250,000 (for individuals) or $500,000 (for married couples filing jointly) from their income (of capital gain) when they sell the property.

So, be wise and choose the right time to sell your primary residence.

Earned Income in these states

Some US states are more tax friendly than others. These eight states have no individual income tax:

  • Florida

  • Alaska

  • Nevada

  • Tennessee

  • South Dakota

  • Texas

  • Washington

  • Wyoming

Another state that has our interest is New Hampshire, which also does not tax earned income from wages and salary but does tax interest and dividend income. Also, while most states do not tax Social Security income, you will still have to pay taxes on it due to federal laws.

Check this interesting video on the Batgirl movie and why it helped save money:

💰 Be a Better Investor

“If you would be wealthy, think of saving as well as getting.

Benjamin Franklin

Resources:

What did you think of today's newsletter?

Login or Subscribe to participate in polls.

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.