🪔 What to expect this week

and no rally this X-Mas?

Good morning investors! This will be a short week so prepare for little volatility.

Today we cover:

  • What to expect this week

  • Will there be a rally?

  • Real estate risks.

Will stocks end 2025 higher?

Login or Subscribe to participate in polls.

Reminder: We shared this week’s PRO version with all our subscribers (for FREE) as a Christmas gift. You can access all previous PRO versions and future issues for just $3.99 a month (special offer - real price $19 per month). Upgrade now to access this and benefit from our picks and more.

📊 Economy and News 

What to expect this week

The Christmas holiday will shorten trading hours this week. Markets will close on Wednesday, while Tuesday will see stock trading end at 1 p.m. ET and bond markets close at 2 p.m. ET.

Despite the abbreviated schedule, several key economic reports are due. The week begins on Monday with the Consumer Confidence Index, offering insights into consumer sentiment and inflation expectations as the Federal Reserve remains vigilant about economic trends.

Tuesday will bring updates on durable goods orders and new home sales, providing a snapshot of manufacturing activity and the housing market’s performance in November. These reports follow strong existing home sales data and are closely watched for signs of economic momentum.

On Thursday, initial jobless claims for the week ending December 21 will shed light on labor market conditions, a critical area of focus for the Federal Reserve. The week concludes Friday with data on international trade and retail and wholesale inventories, offering clues about economic activity and business expectations for the months ahead.

Earnings announcements will be sparse, though Anavex Life Sciences is scheduled to release its quarterly results on Monday.

Global hits:

Controversial: ‘Tariffs all the way’: Trump says European Union must buy U.S. oil and gas in trade ultimatum as Qatar vows to stop EU gas sales if fined under due diligence law

Also check: VW reaches union deal to cut 35,000 German jobs after grueling talks.

Sponsored by The Motley Fool

AI-ighty Potential

Dubbed the "the rocket fuel of AI" by Wired, this groundbreaking innovation has sparked fervent excitement across Wall Street. And with projections soaring to a potential market cap of $80 trillion – equivalent to 41 Amazons – the magnitude of its impact cannot be overstated.

But here's the real deal: nestled within this tech revolution lies an opportunity for sharp investors to invest in a remarkable company poised to dominate its corner of this burgeoning market.

And thanks to The Motley Fool, the full narrative of this extraordinary tech trend has been compiled into an exclusive report, designed to arm you with the insights needed to make informed investment decisions.

📈 Stocks

S&P 500 5,930.85 (+1.09%)
DJIA 42,840.26 (+1.18%)
NASDAQ 19,572.60 (+1.03%)
BRENT CRUDE 72.94 (+0.08%)
* Prices as of Dec 22nd, 12:20 AM UTC

Santa Claus Rally in Doubt as U.S. Stocks Struggle in December

The holiday season often brings optimism to the stock market, but December has so far delivered lackluster returns. Despite a strong year with the S&P 500 up over 24%, recent market declines and economic challenges suggest a cautious outlook for the year’s end.

The "Santa Claus Rally," a period typically associated with gains in the final trading days of the year and early January, may not materialize. The Federal Reserve’s unexpected signal of fewer rate cuts in 2025 led to the S&P 500’s sharpest one-day drop since August. Rising Treasury yields, at their highest levels in over six months, are adding pressure on equities, which remain expensive compared to historical valuations.

Market breadth has weakened significantly, with most S&P 500 sectors in decline this month and the equal-weight S&P 500 index down 7%. While some megacap stocks have posted impressive gains, declines across the broader index and technical indicators suggest fragility.

As the year winds down, the likelihood of a Santa Claus rally is uncertain. Investors are advised to remain cautious and watch for signs of broader market support before making significant moves.

Novo falls: Shares of Novo Nordisk plummeted roughly -20% on Friday. The fall comes after the Danish pharmaceutical giant reported results in a late-stage trial for its experimental CagriSema weight loss drug that missed expectations.

Novo, however, said that CagriSema had outperformed Wegovy in weight reduction and that its performance was “on par with best-in-class treatments.” The report helped other companies like Eli Lilly jump.

💵 Personal Finance

Real estate investment risks

There are also some risks associated with investing in real estate. These include:

  • High cost: Real estate can be a relatively expensive investment, especially if you are buying a single-family home. The median price for an existing home — one that's already standing, not new construction was $415,500 in February compared to $409,500 in January and $410,200 in June 2023. You will find cheaper homes in the country but they're not always worth it.

  • Illiquidity: Real estate can be difficult to sell quickly, especially if the market is slow. On average, it takes 30 to 90 days to sell a home. This can be an issue for people who require liquidity.

  • Maintenance: Rental properties require regular maintenance and repairs, which can be costly. The average homeowner spends $1,400 to $2,300 on regular maintenance per year, excluding unexpected repairs.

  • Tenants: Dealing with tenants can be a challenge, and there is always the risk of non-payment or damage to the property. Plus, you may not easily find a tenant as the vacancy rate in the country is over 10%.

Despite the risks, real estate can be a very rewarding investment. If you are willing to do your research and manage your property carefully, you can potentially generate significant income and build wealth over the long term.

💰 Be a Better Investor

Money, like emotions, is something you must control to keep your life on the right track.”

Natasha Musnon

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.