đŸȘ” What to expect this week

and Nvidia is a darling

Good morning investors! After a mixed holiday week, prepare for another short week.

Today we cover:

  • What to expect this week

  • Homelessness in the US

  • Nvidia is gaining interest

📊 Economy and News 

Holiday-Shortened Trading Week Brings Key Economic Updates

This week marks a holiday-shortened trading period, with stock and bond markets closed on Wednesday for New Year’s Day. Bond markets will also close early on Tuesday in observance of New Year’s Eve. Investors will keep an eye on whether the markets delivered a Santa Claus Rally as the year ends.

Still, expect fireworks as a few reports are to come.

Key Events to Watch:

  • Monday, Dec. 30
    Reports include the Chicago Business Barometer (December), the Dallas Fed Manufacturing Survey (December), and November’s pending home sales data.

  • Tuesday, Dec. 31 (New Year’s Eve)
    The S&P Case-Shiller Home Price Index and FHFA House Price Index for October will be released. Bond markets close early at 2 p.m. EST.

  • Wednesday, Jan. 1 (New Year’s Day)
    Stock and bond markets remain closed.

  • Thursday, Jan. 2
    Key reports include initial jobless claims for the week ending Dec. 28, November construction spending, and the final U.S. manufacturing PMI for December. Tesla is also expected to release its fourth-quarter delivery figures, and Lifecore Biomedical will report earnings.

  • Friday, Jan. 3
    December’s ISM Manufacturing PMI data will be released, alongside remarks from Richmond Fed President Tom Barkin.

Investors will closely monitor these updates as the first week of 2025 begins, setting the tone for the new year.

Global hits:

Homelessness in the United States Hits Record High

Homelessness in the U.S. soared to over 770,000 in 2024, an 18% increase from 2023 and the largest annual rise since 2007, according to HUD. The crisis is fueled by a lack of affordable housing, increased migration, and natural disasters displacing residents.

Decades of under-building have left housing demand far outpacing supply, driving home prices to record highs and keeping borrowing costs elevated despite Federal Reserve rate cuts. Rent costs have also surged, with nearly half of renters spending over 30% of their income on housing as of 2023.

One bright spot was a nearly 8% drop in veteran homelessness, reaching a record low of 32,882 in 2024, thanks to efforts by the Department of Veterans Affairs. However, the broader housing crisis continues to deepen, underscoring persistent affordability and supply challenges.

Worth knowing: Big Lots strikes deal to keep hundreds of stores open and save jobs. Elsewhere, The National Retail Federation announced last week that spending from November 1 through December 31 is “on track” to set a record, projected between $979.5 billion and $989 billion, helping consumer spending hit new highs.

Sponsored by YNAB

If you're ready to take your budgeting game to the next level, we've got a fantastic tool for you—You Need a Budget (YNAB)!

YNAB is a budgeting app that helps you use your money more efficiently, so you can control your spending and saving like a pro.

📈 Stocks

S&P 500 5,970.84 (-1.11%)
DJIA 42,992.21 (-0.77%)
NASDAQ 19,722.03 (-1.49%)
BRENT CRUDE 74.17 (+1.24%)
* Prices as of Dec 30th, 12:20 AM UTC

Retail Investors Flock to Nvidia as AI Dominance Drives Stock Growth

As artificial intelligence becomes a central part of modern life, individual investors have sought to align their portfolios with this trend, with Nvidia emerging as the clear favorite. Retail traders poured nearly $30 billion into Nvidia shares in 2024, making it the most-purchased stock by this group. Net inflows for Nvidia this year were almost double those for the SPDR S&P 500 ETF Trust and are on track to surpass Tesla’s record as the top retail pick in 2023.

The chipmaker’s remarkable rise has been fueled by its dominance in AI technology, driving its stock price up over 180% in 2024. This performance has elevated Nvidia to the Dow Jones Industrial Average and a market capitalization exceeding $3 trillion. Retail traders now hold Nvidia as the second-largest position in their portfolios, with its weight growing from 5.5% at the start of the year to over 10%.

Despite some volatility in December, Nvidia remains a symbol of retail investor enthusiasm for AI innovation. While inflows have moderated, Nvidia’s rapid ascent and influence in the AI sector continue to make it a compelling investment choice.

However, another name (Palantir) has gained traction among retail investors, particularly in the fourth quarter. The software company’s 380% growth in 2024 has positioned it as one of the year’s best-performing stocks and a potential contender for retail investors' attention in the coming year. As megacap tech names dominate, the trend reflects retail traders' pursuit of opportunities in the ongoing bull market.

Netflix shines: Netflix achieved a historic milestone with its two NFL games on Christmas Day, drawing nearly 65 million viewers nationwide, according to Nielsen. These matchups set a new benchmark for the most streamed NFL games in U.S. history.

Meanwhile, the NBA also experienced a surge in popularity, recording its highest Christmas Day viewership in five years. Across five games, the league averaged 5.25 million viewers per game in the U.S., underscoring the day’s appeal for sports fans.

Good to know: Trump urges Supreme Court to hit pause on a law that could ban TikTok in the U.S. next month. Also, Boeing has issued a statement after one of its 737-800 jets crash landed in South Korea on Sunday, killing at least 174 people. The company has joined investigation is and is ready to fully support investigations.

đŸ’” Personal Finance

ETF types to know about

There are several types of exchange-traded funds (ETFs), each with its own characteristics and investment objectives. Here are some common types:

  1. Equity ETFs: These ETFs invest in stocks and aim to replicate the performance of a specific stock index, such as the S&P 500. They offer diversification across multiple stocks within a single investment.

  2. Bond ETFs: These ETFs invest in fixed-income securities like bonds. They can provide income through regular interest payments and are generally less volatile than equity ETFs.

  3. Sector and Industry ETFs: These ETFs focus on specific sectors or industries, such as technology, healthcare, or energy.

  4. Commodity ETFs: These ETFs invest in physical commodities like gold, silver, or oil. They can provide exposure to commodity prices without the need for direct ownership of the physical assets.

  5. International ETFs: These ETFs invest in stocks or bonds from countries outside the investor's home country. They provide exposure to international markets and can help diversify a portfolio.

  6. Inverse ETFs: Also known as short ETFs, these funds aim to profit from a decline in the value of an underlying index or asset.

  7. Leveraged ETFs: These ETFs use financial derivatives and debt to amplify the returns of an underlying index. They are designed for short-term trading and can be riskier than traditional ETFs.

  8. Smart Beta ETFs: These ETFs follow rules-based strategies that aim to outperform traditional market-capitalization-weighted indexes. They use factors like value, momentum, or volatility to select and weight securities.

  9. Dividend ETFs: These ETFs invest in stocks that pay high dividends. They are popular among income-seeking investors who want to generate regular income from their investments.

It's important to understand the specific objectives and risks associated with each type of ETF before investing.

Check this video for more:

💰 Be a Better Investor

“The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.”

Seth Klarman

Resources:

What did you think of today's newsletter?

Login or Subscribe to participate in polls.

đŸ‘©đŸœâ€âš–ïž Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.