ANGLES.

The weekend’s appalling events in Minnesota provoked Congressional maneuvering that triggered the very real risk of another federal government shutdown by the end of the week (the prediction market odds rocketed from a 9% likelihood to 80% in a matter of hours) which could toss financial markets into another economic data slop bucket.

Nevertheless, following a choppy Asian session, New York traders who made it to their posts on Monday in the wake of the winter storm carried stocks higher to within touching distance of more new all-time record highs on subdued volume to start a week dominated by Big Tech earnings and a Fed meeting.

Trump barked more threats at Canada and South Korea, but markets aren’t really listening any more as the default position now appears to be that he’s more likely than not going to backtrack on his tariff rhetoric, so why bother worrying about it?

Consumer confidence in the economy cratered to twelve-year lows and is now at levels well below where it was even in the scary early weeks of COVID, according to data released on Tuesday. Amazon and UPS announced colossal layoffs. A good number of healthcare and insurance stocks plunged as Medicare payment rates from the government were essentially frozen and United Healthcare simultaneously issued an awful earnings report and a depressing outlook.

But Wall Street shrugged off this rather miserable backdrop, seemingly betting that Congress will eventually find some kind of a shutdown off-ramp before the weekend and the indexes moved upwards again on the back of some mostly positive other (more B-list) Q4 earnings with a number of higher impact Mag 7 reports on deck for later in the week. The S&P 500 index closed at yet another all-time high.

A big Wednesday dawned with stocks adding some weight to the rally with the S&P 500 briefly breaking through 7000 at the open in advance of the Fed Funds Rate decision at 2pm ET and chairman Powell’s press conference half an hour later.

Obviously there was no rate cut with two dissents out of twelve voting members, including one from next-chairman-candidate Chris Waller, which was perceived by most observers as nothing more than a “Look at me sir, I’m doing what you asked! Please pick me!” signal to Trump.

In what ended up being a snoozer of a press conference, Powell shut down any discussion of the threats from the White House to his own position or to Fed independence in general. Stocks closed the session flat and attention quickly turned to post-closing bell Q4 earnings reports from three of the big dogs.

The bar is high when it comes to tech earnings and simply matching or even somewhat beating expectations is simply not good enough any more. While Tesla’s results were just meh, Meta meaningfully topped estimates by enough to see its stock price move higher in the aftermarket. Microsoft strongly disappointed.

Geopolitics returned to center stage on Thursday with Trump’s war threats and Iran’s aggressive response spiking oil prices. The US trade deficit widened as exports fell and imports rose despite tariffs. At least a partial government shutdown by the weekend remained very much on the table. Meta soared higher but Microsoft crashed hard and had its worst day in over five years.

The indexes took this all very badly at the open, particularly Big Tech as markets were reminded about gigantic levels of AI spending that may or may not pay off and the rising risks of ongoing circular financing in the industry.

A late bout of dip-buying limited the damage and after the bell we got Apple’s earnings. AAPL shares had fallen for eight straight weeks, the longest such losing streak since 1993 but the report was impressive, beating expectations on most metrics including record-ever global iPhone sales.

Senate Democrats and the White House appeared to be close to a deal on Thursday night to kick the shutdown can down the road, but the big news on Friday morning was Trump’s nomination of former Fed governor Kevin Warsh to succeed Powell as Fed chairman. While not Wall Street’s first choice (that was Rick Rieder), there was some relief that the awful Kevin Hassett and teacher’s pet Chris Waller were not tapped.

Stock market reaction was initially muted and interest rates didn’t do much, indicating that Wall Street was generally comfortable with the choice but also Warsh’s Senate confirmation is not yet in the bag.

However, stocks spent the rest of the session accelerating losses - once again dragged down by tech - to finish the day in the red, the week essentially unchanged but the month in the green.

Last week, the US Dollar fell to levels not seen since 2021 and a declining domestic currency makes holding overseas securities more attractive for US-based investors and the strong outperformance of international stock ETFs reflects this (including all-time record highs just last week). Also, Small Cap stocks in the US are behaving significantly better than Large Cap stocks so far this year (see LAST WEEK BY THE NUMBERS below).

This all emphasizes the importance of holding a non-concentrated, sensibly diversified portfolio that goes well beyond just big US tech companies. Owning individual stocks or even nothing but a market-cap weighted S&P 500 or NASDAQ index fund is sub-optimal right now.

I was recently interviewed by Vetta-Fi who host the annual Exchange ETF conference in Las Vegas about my practice. You can read the interview here.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

“People take more risk when stocks go up and the economy is booming, and it can last surprisingly long.” The Wall Street Journal’s Jason Zweig on the importance of separating a “Mad Money” cowboy account where you screw around with speculative bets from your actual real investments.

.. AND I QUOTE ..

“Investors hate uncertainty. Well, that’s just tough. Uncertainty is all investors have ever gotten.”

Jason Zweig, Wall Street Journal

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Energy for the second week in a row (two biggest holdings: Exxon-Mobil, Chevron) ⬆︎ 3.3% for the week

Last week’s worst performing US sector: Healthcare (two biggest holdings: Eli Lilly, Johnson & Johnson) ⬇︎ 1.7% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 0.4% last week, is up 1.5% so far this year and ended the week 0.8% below its all-time record closing high (01/27/2026).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 2.0% last week, is up 5.5% so far this year and ended the week 4.4% below its all-time record closing high (01/22/2026).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 0.2% last week, is up 5.6% so far this year and ended the week 2.2% below its all-time record closing high (01/27/2026).

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.67% (3.70% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.52% (3.60% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.79% (3.84% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.26% (4.24% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.82% (4.78% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.87% (4.82% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

Trump weaponized tariffs again over the weekend but this time in order to pursue his global territorial ambitions. He proposed tariff-based sanctions on allied countries voicing concerns over a proposed illegal US annexation of Greenland, including the UK, France, Germany, the Netherlands as well as the Nordic bloc, who reacted by forcefully reiterating their “non-negotiable” support for Greenland’s fundamental right to self-determination and Denmark’s existing oversight over the territory.

US markets were closed on Monday but stocks tumbled in Europe in response to the growing Greenland s**t-show as European leaders finally showed the first hint of a backbone, weighing retaliatory tariffs on $100 billion of US goods.

Meanwhile the skies above Davos, Switzerland were swarming with private jets as the odious, self-absorbed annual gathering got under way and attendees began scoffing their caviar and lobster while bracing for Trump’s arrival on Wednesday.

Back in the real world, Wall Street aggressively dumped stocks across the board on Tuesday, driven by the apparent resumption of global tariff wars (Trump threatened a crushing 200% on French wines and, annoyingly for the Davos crowd, champagne) and a return of the “Sell America” trade as well as developments in Japan where fiscal concerns caused local long term interest rates to skyrocket to all-time highs (see .. AND I QUOTE .. below).

Stock indexes all closed substantially lower for their worst session since last April’s “Liberation Day” meltdown with Big Tech/AI names worst affected.

After the closing bell, Netflix reported decent Q4 earnings, but the market reaction was negative with continued uncertainty about the company’s spending pending the final outcome of the Warner Brothers saga and the stock extended its recent slump (down 30% over the last three months).

On Wednesday morning, Trump delivered a rambling 90-minute + speech in Davos to an audience very well-schooled in business and economic data that was filled with a lot of statistics and statements that were, shall we say, rather divergent from the truth (including the “total defeat” of US inflation, a 5%+ economic growth rate, the mathematically impossible reduction of prescription drug prices by thousands of percent, his eight solved wars etc., to name but a few).

He doubled down on the US annexation of Greenland (“it’s our territory”), mistook Iceland for Greenland four times, revived his 2020 election delusions (“prosecutions are coming”) and floated his absurd notions of capping credit card interest rates at 10% till just after the midterms, banning institutional ownership of houses and blocking private companies in the aerospace and defense sectors from paying any dividends to shareholders.

From this smorgasbord of available narratives, Wall Street initially chose to pick up on his apparent pledge not to take Greenland by military force and stocks stabilized after Tuesday’s rout. Then, mid-afternoon, Trump unveiled his biggest and quickest TACO climbdown ever in the face of a unified resistance from Europe and the worrying reaction of financial markets, announcing that the punitive Greenland-related tariffs proposed just four days earlier would now not go into effect.

This obliterated much of the rationale for Tuesday’s heavy decline and the stock indexes roared higher to erase about two-thirds of it in the final hours of trading.

The geopolitical de-escalation recovery in stocks continued on Thursday as dip-buyers held a victory lap. The PCE report came in as expected, confirming continued sticky inflation (2.8%) and gradually slowing economic growth. The indexes closed nicely higher again although still a little short of where they were on Friday of the previous week. After hours, Intel (10% owned by the US government) disappointed with its earnings report and provided a shaky outlook. The stock price got absolutely spanked in the after-market.

A wild week came to a muted close on Friday as the recovery rally faded with Intel’s plunge stifling any further gains. By the closing bell, the indexes had barely moved, suffering their first back-to-back weekly losses since June and New York traders hurried home to prepare for the monster snowstorm.

The Fed interest rate-setting meeting this coming Wednesday will be interesting, not because it is likely to make any moves (see INTEREST RATE EXPECTATIONS below), but because chairman Powell will be peppered with questions from the financial press pack about his job security and the future of Fed independence from presidential interference.

The beauty pageant that is the selection process for the role to succeed Powell as the next Fed chairman seems to be coming to a close and the odds are changing rapidly. Wall Street seems mightily relieved that Trump glove puppet Kevin Hassett’s chances appear to have collapsed and that Rick Rieder’s star is on the rise.

I was recently interviewed by Vetta-Fi who host the annual Exchange ETF conference in Las Vegas about my practice. You can read the interview here.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

Even if you definitively knew the future (impossible, of course), you would still fail to successfully time the market because you wouldn’t know how others will react, which is all that matters.

A must-read article from Ritholz’s Nick Maggiulli for anyone who thinks they can outsmart the market. TLDR: You can’t.

.. AND I QUOTE ..

“What happened in Japan is a very important message to the House and to the Senate: You need to get our fiscal house in order.”

Ken Griffin, CEO of Citadel

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Energy (two biggest holdings: Exxon-Mobil, Chevron) ⬆︎ 3.2% for the week

Last week’s worst performing US sector: Financials (two biggest holdings: Berkshire Hathaway, JP Morgan) ⬇︎ 2.5% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 0.4% last week, is up 1.1% so far this year and ended the week 1.0% below its all-time record closing high (01/12/2026).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 0.4% last week, is up 7.6% so far this year and ended the week 1.0% below its all-time record closing high (01/22/2026).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.1% last week, is up 5.4% so far this year and ended the week at its all-time record closing high.

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.70% (3.67% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.60% (3.59% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.84% (3.82% a week ago)

* 10 YEAR TREASURY *** ⬌ 4.24% (4.24% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.78% (4.79% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.82% (4.83% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending.

*** Used as …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

Three potentially significant market-impacting stories developed over the weekend.

* Firstly, Trump’s desperation to do away with Fed chairman Jerome Powell, demolish the independence of the central bank and take personal control of US interest rate policy resulted in an obvious intimidation tactic of a criminal prosecution threat. Incredibly, a haggard-looking Powell was forced onto YouTube on Sunday, vowing to stand firm against extraordinary White House political interference.

* Secondly, the president outright told reporters “We are going to take Greenland” even though the US has precisely zero legal or historical basis for doing so. Such a move by military force could destroy NATO.

* Thirdly, an escalation in both rhetoric and violence in Iran put to the test Trump’s recent threat to react militarily to the Iranian authorities killing protesters, something that has undoubtedly already taken place.

Wall Street was understandably spooked by this avalanche of uncertainty at the opening bell on Monday. Stocks initially pulled back from record high levels, interest rates jumped and the US Dollar dived. The financial sector was particularly rattled after Trump baselessly claimed that any credit card company charging over 10% interest (the national average is currently 21%) after Monday 20th January would be “breaking the law”.

Traders eventually turned their focus from the stream of bizarre proclamations coming from the White House to upcoming Q4 earnings and the indexes recovered to score mild gains and close at yet more new record highs. Alphabet/Google became just the fourth company to ever move above a $4 trillion valuation.

After Asian stock markets reached new all-time record highs overnight amid the announcement of a snap election in Japan, the main event in the US on Tuesday was the pre-market CPI report which showed an as-expected 2.7% annualized inflation rate, but falling prices at the gas pump masked some quite significant increases elsewhere.

The data provided a brief crumb of hope for a Fed Funds Rate cut on January 28th, but it is still considered to be a very long shot (see INTEREST RATE EXPECTATIONS below). JPMorgan and Delta Airlines kicked off the earnings season but traders were unimpressed and the indexes slipped downwards, finishing near the lows of the day.

Wells Fargo, Bank of America and Citibank joined JPMorgan on Wall Street’s naughty step after earnings disappointments on Wednesday morning. We also got a pre-market PPI reading that validated the CPI inflation outlook but Retail Sales continued to hold up.

Big Tech/AI names bore the brunt of what appeared to be an intense bout of Large Cap profit-taking with S&P 500 and NASDAQ finishing the session meaningfully lower with every Magnificent Seven stock closing in the red, but at the same time the Russell 2000 Small Cap Index scored its fourth all-time record high of the young year, emphasizing the under-the-surface rotation that seems to be taking place.

On Thursday morning, a very low weekly Jobless Claims number poured cold water on any flickering hopes of a January rate cut and interest rates spiked up again to four month highs.

Goldman Sachs, Morgan Stanley and Taiwan Semiconductor all delivered solid Q4 earnings and the major indexes finished the session back in the green with a renewed spring in their step as the somewhat shaky start to the week seemed to trigger some dip-buying of the more beaten-down names.

Stocks meandered along aimlessly on a quiet Friday in advance of a three-day weekend as a volatile week came to an end with another utterly bonkers proposal, this time teased by Fed chairmanship candidate and Trump’s grinning bootlicker-in-chief Kevin Hassett, to encourage people to empty their workplace retirement plans to buy a house.

The major indexes closed on Friday pretty much where they had opened on Monday, except for Small Caps which were considerably higher following eleven consecutive days of outperforming the big boys in the S&P 500 - the longest such streak since the late 1980s.

The events of the last couple of weeks have shown that pretty much anything is on the table for this administration when it comes to short term electoral bribes between now and the midterms. Investors need to be braced for a “flood the zone” strategy of wave after wave of outlandish populist proposals in the lead-up to November 3rd, many (but not all) of which may well be just mindless rhetoric and constitutionally unachievable.

The relative lack of market reaction to all this preposterous blather, as well as to the now open warfare between the president and the central bank, seems to be emboldening Trump. So far, financial markets are treating it all as just political theater but at some point (maybe this week at the repulsive and out-of-touch orgy of self-congratulation, brown-nosing and performative b******t in Davos?), the ambiguity and recklessness of many of these Soviet-style interventionist schemes will likely take their toll with potentially damaging consequences for risk assets and, while we’re not there yet, we may well be getting closer.

I was recently interviewed by Vetta-Fi who host the annual Exchange ETF conference in Las Vegas about my practice. You can read the interview here.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

“If the home you live in goes from $200k to $1m, you are not wealthy, because the replacement home also costs $1m. You are trapped.”

Ritholtz’s Nick Maggiulli asks, Is Home Equity Fake Wealth?

.. AND I QUOTE ..

“An unprecedented attempt to use prosecutorial attacks to undermine [Federal Reserve] independence”.

Eleven ex-Treasury Secretaries, past Fed chairs and top economists in a joint statement describing last week’s threatened criminal probe into Fed chairman Powell.

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Real Estate (two biggest holdings: Welltower, Prologis) ⬆︎ 4.2% for the week

Last week’s worst performing US sector: Communication Services (two biggest holdings: Google, Meta) ⬇︎ 2.3% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 0.4% last week, is up 1.4% so far this year and ended the week 0.6% below its all-time record closing high (01/12/2026)

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 2.1% last week, is up 8.0% so far this year and ended the week at its all-time record closing high.

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.0% last week, is up 4.2% so far this year and ended the week at its all-time record closing high.

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.67% (3.62% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.59% (3.54% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.82% (3.75% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.24% (4.18% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.79% (4.76% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.83% (4.82% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for de…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

The weekend newswires were obviously dominated by the abduction of Nicolas Maduro and his wife during a large-scale deadly US military attack on Venezuela. Trump bizarrely declared US remote sovereignty over the country that supposedly has the world’s largest oil reserves, with zero detail about how this would be accomplished but also refusing to rule out the deployment of American troops on the ground.

It was also heavily implied that either Cuba, Colombia, Mexico or Greenland could be the next cab off the rank for similar treatment.

As stock traders got back to the grind after the holidays on Monday, Asian and European markets and even the oil price mostly shrugged off the weekend’s events and US stocks sprang higher at the open, led by energy names who stand to potentially benefit from developments in Venezuela and tech names with the kick-off in Las Vegas of the annual CES, a kind of battleground for chipmakers and designers to announce and show off their sexy new products. But a late-arriving Santa Claus had gifts for most of the risk-on sectors and the indexes closed the session solidly higher on much improved volume.

Stocks opened in a more muted fashion on Tuesday morning but quickly picked up steam as the session wore on. The gains seemed to be simply momentum-based as there was no real news, data or a specific catalyst for the rise in the indexes, but the S&P 500 still reached its first new all-time record high of the year, creeping ever closer to the 7,000 mark.

Wednesday saw heavily-outdated JOLTS data indicating an expected decline in job openings, an also-anticipated drop in Durable Goods orders as well as flashpoints in international waters as the US military ran around seizing Venezuela-linked oil tankers, including an empty Russian one.

Stocks continued higher at a more cautious pace but a late day swoon ended the three-day winning streak after Trump went on an out-of-left-field social media blitz to signal a ban on large investors from buying homes, forced taxpayer purchase of mortgage bonds and aerospace and defense companies (think GE, Lockheed Martin, possibly even Boeing) to no longer be allowed to issue dividends to shareholders while at the same time advocating for sky-high, deficit-busting levels of more than half a trillion dollars of increased defense spending.

This slew of outlandish interventionist policy proclamations continued to weigh on enthusiasm on Thursday and the stock indexes basically spent the session treading water but with a somewhat noticeable rotation out of the Magnificent Seven into Small Cap stocks with the Russell 2000 Small Cap Index achieving a new all-time record high.

We finally got to see a cleaner Jobs Report pre-market on Friday after recent data contamination due to the shutdown which showed a lackluster level of new job creation but a drop in the unemployment rate to below 4.4%. As a result, the odds of a January 28th cut in the Fed Funds Rate tumbled to negligible levels (see INTEREST RATE EXPECTATIONS below).

Stock indexes moved steadily higher and deeper into record territory, once again led by Small Caps, bringing to an end an exhausting but price-positive week with the anticipation of the Q4 earnings season kicking off in the coming days.

I don’t usually focus on individual names in this report, but here’s a pop quiz .. Where do you think Nvidia’s returns in 2025 ranked among the stocks in the S&P 500 index? .. The answer might surprise many, Nvidia was actually only the 75th best performer out of the 500 (#1 was SanDisk), but it was the biggest contributor to the positive performance of the index (and thereby to S&P 500-tracking ETFs and mutual funds) due to its high weighting (almost 8% of the entire index).

As a group, all of the Magnificent Seven stocks outperformed the S&P 500 index in 2023, six of them did in 2024 but just two of them did in 2025.

The fact is that Nvidia’s stock price has been in the doldrums since late October and remains 10% lower than it was back then on capital spending concerns, while the S&P 500 has traded at multiple new all-time highs in that time, including again just last week.

The bar for further large gains in Nvidia’s price is high but among other components of the S&P 500 index and others (including international indexes), there appear to be plenty of stocks (Google, AMD and a collection of overseas companies, for example) willing to pick up Nvidia’s slack.

So, yet again, we see the overwhelming argument for holding thousands of different stocks across multiple geographies, sectors and capitalizations using ETFs rather than concentrating your bets by selectively picking just a handful of names, bets you will likely lose.

I was recently interviewed by Vetta-Fi who host the annual Exchange ETF conference in Las Vegas about my practice. You can read the interview here.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

Prediction platforms are enabling bets on everything from who’ll be the next Fed chairman to will Zelensky wear a suit, from the World Cup winner to the timing of a second coming of Jesus Christ. But there are significant questions about access, integrity and regulation.

.. AND I QUOTE ..

“We think people are sleeping on the macro risks — and [Venezuela] is a macro risk we didn’t even see.”

Christopher Harvey, Head of equity and portfolio strategy, CIBC Capital Markets

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Consumer Cyclical (two biggest holdings: Amazon, Tesla) ⬆︎ 5.1% for the week

Last week’s worst performing US sector: Utilities (two biggest holdings: NextEra Energy, Constellation) ⬇︎ 1.6% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.6% last week, is up 1.7% so far this year and ended the week at its all-time record closing high.

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 4.6% last week, is up 5.7% so far this year and ended the week at its all-time record closing high.

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.7% last week, is up 3.2% so far this year and ended the week at its all-time record closing high.

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.62% (3.65% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.54% (3.47% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.75% (3.74% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.18% (4.19% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.76% (4.81% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.82% (4.86% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬆︎ 6.16%

One week ago: 6.15%, one month ago: 6.21%, one year ago: 6.93%

Data courtesy of the Freddie Mac Primary Mortgage Market Survey

INTEREST RATE…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

Another holiday-shortened week began with Trump holding an apparently chummy meeting in Florida with Zelensky followed by a cozy phone call with Putin, but the desperate PR spin from all sides afterwards was unable to mask the reality that a workable peace deal is still well out of reach.

Stocks retreated further on Monday from their Xmas Eve record highs on pitiful trading volume on the back of some year-end profit-taking as niggling doubts persisted about AI company valuations and the ultimate projected rate of return on their gigantic levels of spending. Interest rates inched higher.

The penultimate trading day of the year on Tuesday saw a churn to nowhere for stocks. The release of the minutes from the most recent Fed rate-setting meeting that voted to cut by 0.25% indicated a divided committee with a number of members clearly open to changing their minds and their votes depending on upcoming economic data. Some Big Tech/AI names recovered a little but the session was a low volume snooze-fest with the indexes barely moving.

Stocks exited 2025 with a whimper on Wednesday, slipping lower over the course of another lethargic session.

For the calendar year, the S&P 500 was up ~17%, its sixth year of 15%+ gains in the past seven and ended close to its all-time record high. The NASDAQ was up ~20%, but international markets (developed and emerging combined) outperformed the US for the first time in years with an aggregated ~30% increase in 2025.

Peru was the world’s best-performing stock market in dollar terms through late December 2025 (+88%) and the worst was Saudi Arabia (-7%).

The US (as represented by the S&P 500) finished in 39th place out of the 51 countries and regions studied in terms of stock market performance.

The new trading year kicked off on Friday with international stocks off to the races again but US equities slumbered through another dreary low-volume session. A renewed bout of TACO broke out with a number of selected tariffs getting delayed or diluted, something we can expect to see more of in a mid-term election year. The US indexes closed the day mixed and down for the week.

Wall Street is unanimously bullish on the year ahead, despite the fact that historical data shows generally less-than-impressive average returns in the year following previous strong three-year runs like the one we have just experienced, which has generated an ~84% return so far in the S&P 500 since the October 2022 bottom.

In last week’s report I referenced two of the pillars upon which the rally has been primarily built; a high level of AI enthusiasm and a strong expectation of imminent multiple Fed Funds Rate cuts - both of which could possibly be on the wane as we enter 2026.

There are two other major pillars; stable economic and earnings growth and tariff clarity.

Stable economic growth did a lot of the heavy lifting in 2025 as Wall Street was constantly surprised by how under control inflation appeared to be, how orderly the decline in the labor market has been and how well particularly high-end consumer spending held up, bolstering corporate earnings.

This could all change if the unemployment rate moves sustainably above 5% (currently 4.6%), inflation (currently 2.8%) shifts to the mid-3% range or higher and/or top-earning consumers start pulling back on spending.

A major component of tariff clarity will come any day now when the Supreme Court finally rules on the legality of the emergency powers-contingent IEEPA tariffs, the type used for most of the levy impositions so far. Should the court strike them down, there could be chaos as US companies seek refunds/credits on what they have already paid and the administration will be forced to pivot to other tariff types like Section 232 or Section 301.

2026 also promises a revamped Federal Reserve led by a spineless Trump yes-man, a probably nasty midterm election campaign likely to result in a divided Congress, continued geopolitical volatility, upside and downside economic data surprises, new themes and paradigms and a whole collection of bombshells that we cannot even conceive of yet.

I’ll do my best to keep you updated and informed each week as these all play out.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

“Some might argue that [an investment’s performance relative to the broad market] is all that matters, but I disagree.”

Ritholtz’s Nick Maggiulli on why beta > alpha and mathematical proof that indexing works better than than trying to find market-beating stocks.

.. AND I QUOTE ..

“Choice can be a tax, not a benefit. Consumers don’t want more choices; they want more confidence in the choices presented.”

Scott Galloway

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Energy (two biggest holdings: Exxon-Mobil, Chevron) ⬆︎ 3.3% for the week

Last week’s worst performing US sector: Consumer Cyclical (two biggest holdings: Amazon, Tesla) ⬇︎ 3.0% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 1.0% last week and ended the week 1.2% below its all-time record closing high (12/24/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 1.1% last week and ended the week 3.7% below its all-time record closing high (12/10/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 0.9% last week and ended the week at its all-time record closing high.

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.65% (3.64% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.47% (3.46% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.74% (3.68% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.19% (4.14% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.81% (4.76% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.86% (4.81% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.15%

One week ago: 6.18%, one month ago: 6.20%, one year ago: 6.91%

Data courtesy of the Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the next rate-setting meeting on January 28th?

* Unchanged from now .. ⬆︎ 83% probability (82% a week ago)

* 0.25% lower than now .. ⬇︎ 17% probability (18% a week ago)

With eight rate-setting meetings in 2026, what is the most commonly-expected number of 0.25% Fed Funds interest rate cuts this year?

* ⬌ Two (unchanged from a week ago)

Data courtesy of CME FedWatch Tool

All data based on the Fed Funds interest rate (currently 3.625%). Calculated from Federal Funds futures prices as of the market close on Friday.

PERCENT OF S&P 500 STOCKS ABOVE THEIR OWN 200-DAY MOVING AVERAGE:

* ⬇︎ 59%

One week ago: 60%, one month ago: 58%, one year ago: 55%

Data courtesy of MacroMicro as of Friday’s market close

This widely-used techni…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

The stock market was starting to run out of ammunition when it came to any meaningful remaining economic data releases this year with just PCE inflation and GDP to come and any Santa Claus rally would have to be built mainly on vibes. It would also be subject to geopolitical winds which don’t look great (Venezuela, Ukraine, Middle East) as well as the volatility that can often result from thin holiday markets and lightly-populated trading desks.

The three-and-a-half day week began positively on Monday following the previous week’s surprise drop in inflation and lukewarm US labor market data keeping a January Fed Funds Rate cut at least on the table. After an as-expected 2.8% PCE inflation reading pretty much confirming the previous week’s CPI numbers, the stock indexes made a charge to try to squeeze in some more record highs before the ball drops on New Year’s Eve, closing higher and back into the green for the month of December, just shy of their goal.

An extraordinary GDP print premarket on Tuesday showed a 4.3% growth estimate for Q3, a two-year high which blew through expectations, although it was tempered by the inclusion in the data of a tactical and temporary acceleration of economic activity during the quarter with companies and consumers trying to get ahead of tariffs.

In this good-news-is-bad-news environment, markets were briefly unnerved by this strong argument against the need for more Fed rate cuts and the market-driven probability of a January reduction fell sharply (see INTEREST RATE EXPECTATIONS below).

The stock rally initially stalled but the indexes soon found their feet in super-low-volume trading and the quest for more new all-time highs resumed and proved ultimately successful in the case of the S&P 500 which closed at a new record.

Defying Trump’s attempts to shut them down, US financial markets were open for a half-day on Wednesday and stocks got back to work marching deeper into record territory on scant volume with the S&P 500 index scoring its 39th all-time high of the year and a first on a Xmas Eve since 2013 when its price reached the giddy heights of 1,833. It is now closing in on 7,000.

With most major international markets closed, New York traders who did decide to show up at their posts on Friday spent a deathly-quiet session (the lowest volume trading day of 2025) with half an eye on the weather forecast, with the North-East bracing for a brutal dumping of snow. Predictably, stocks went nowhere to close out what was still a solid week for the indexes.

The reality is that two of the most important pillars of the now-three-year+ rally in stock prices (during which time the S&P 500 has increased by over 80%), AI enthusiasm and strongly-expected Fed rate cuts, may not necessarily be firmly in place as we move into 2026.

However, with a buoyant GDP, jobs still being created every month, the higher-earning American consumer continuing to spend hard, inflation stable (even though it remains above the Fed’s target) and ongoing cheery corporate earnings, the current odds of a recession in 2026 are no higher than the historical norm (they are never zero).

Having said that, given midterm elections, the uncertain geopolitical landscape and Trump’s habit of routinely lobbing Molotov cocktails into the mix, I think that a degree of unpredictable economic disorder next year can safely be assumed.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

The case for the commonly-held idea that we are in a soon-to-pop AI bubble relies heavily on the precedent of the tech crash in 2000. Here’s an argument for why that may well be a flawed premise and the fears might possibly be unfounded.

.. AND I QUOTE ..

“Respect the trend, but don’t ignore the risks.”

Cameron Dawson, chief investment officer at NewEdge Wealth

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Materials (two biggest holdings: Linde, Newmont) ⬆︎ 1.0% for the week

Last week’s worst performing US sector: Consumer Defensive (two biggest holdings: Walmart, Costco) ⬆︎ 0.4% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.4% last week, is up 17.8% so far this year and ended the week 0.2% below its all-time record closing high (12/24/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 0.3% last week, is up 13.8% so far this year and ended the week 2.6% below its all-time record closing high (12/10/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.6% last week, is up 28.7% so far this year and ended the week 0.5% below its all-time record closing high (12/24/2025).

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.64% (3.62% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.46% (3.48% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.68% (3.70% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.14% (4.16% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.76% (4.77% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.81% (4.82% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.18%

One week ago: 6.21%, one month ago: 6.25%, one year ago: 6.85%

Data courtesy of the Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the next rate-setting meeting on January 28th?

* Unchanged from now .. ⬆︎ 82% probability (78% a week ago)

* 0.25% lower than now .. ⬇︎ 18% probability (22% a week ago)

With eight rate-setting meetings in 2026, what is the most commonly-expected number of 0.25% Fed Funds interest rate cuts next year?

* ⬌ Two (unchanged from a week ago)

Data courtesy of CME FedWatch Tool

All data based on the Fed Funds interest rate (currently 3.625%). Calculated from Federal Funds futures prices as of the market close on Friday.

PERCENT OF S&P 500 STOCKS ABOVE THEIR OWN 200-DAY MOVING AVERAGE:

* ⬆︎ 60%

One week ago: 58%, one month ago: 58%, one year ago: 60%

Data courtesy of MacroMicro as of Friday’s market close

This widely-used technical measure of market breadth is considered to be a very robust indicator of the overall health of the S&P 500 index.

A high percentage (above 70%) generally suggests broad market strength and a bullish trend, while a low percentage (below 30%) may indicate market weakness and a bearish trend.

FEAR & GREED INDEX:

“Be fearful when others are greedy and be greedy when others are fearful.” Warren Buffett.

Data courtesy of CNN Business as of Friday’s market close

The Fear & Greed Index from CNN Business can be used as an attempt to gauge whether or not stocks are fairly priced and to determine the mood of the market. It is a compilation of seven of the most important indicators that measure different aspects of stock market behavior. They are: market momen…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

The last full trading week of 2025 followed a weekend which saw a temporary spike in the odds on the “other Kevin”, Warsh, being nominated by Trump as the next Fed chairman at the expense of Hassett whose potential chairmanship has not been well received by markets due to the perception that he could put the economy at risk by being so clearly deep in the president’s pocket.

Stocks steadied on Monday after the previous Friday’s tech rout as analysts kept up a somewhat optimistic drumbeat in their 2026 index projections but, again, more ho-hum “old school” names and smaller companies behaved better than Big Tech/AI with the ongoing intense punishment of index heavyweights Oracle and Broadcom generating continued AI fatigue which infected other stocks in the sector. It is interesting to note that five of the Magnificent Seven stocks have failed to match the returns of the S&P 500 index this year.

By the closing bell, the S&P 500 was little changed but the NASDAQ was definitely lower. Interest rates inched higher and crypto began to tumble again, with Bitcoin firmly heading towards the fourth down-year in the last eleven, despite the touted tailwinds of its supposed maturity, mass adoption, ETFs and a champion in Trump.

On Tuesday, we got a delayed double Jobs Report for both October and November and it showed job creation pretty much as expected but an unemployment rate ticking up to 4.6%. For financial markets, bad labor market news is generally good news for stocks as deteriorating conditions encourage the Fed rate cut case, but this particular data set was hard to interpret with distortions due to the shutdown and federal workforce restructuring. We also saw Retail Sales numbers which were basically unchanged.

As a result, there was a muted reaction with a negative lean from stocks with attention quickly shifting to potentially more insightful data on the inflation front on Thursday. The indexes closed the session mixed with the S&P 500 slightly down but a late-day pickup in tech stocks carried the NASDAQ lightly into the green.

Ongoing AI skepticism kicked back in on Wednesday and once again it was the darlings of 2025 that led the indexes substantially lower as the butchering of Oracle and Broadcom resumed with big-daddy Nvidia getting pulled into the bloodbath.

The decline was also fueled by potential negotiation breakdowns over Ukraine and US health insurance premium subsidies as well as spiking oil prices caused by rising tensions around Venezuela.

Premarket on Thursday, a delayed CPI release showed a cooler-than-expected 2.7% retail inflation rate, giving the Fed a very bright green light to continue cutting rates. Despite significant caveats and concerns about the reliability of the report given shutdown-related data collection challenges and a lack of context given the fact that there was no October release, Wall Street was giddy with excitement.

Stock indexes soared and interest rates dived. The beaten-down NASDAQ and the interest-rate-sensitive small company universe were the main beneficiaries of the rush to buy.

Overnight, the Japanese central bank raised local interest rates to a three-decade high, unnerving bond traders around the world and bringing Thursday’s fall in US interest rates to a quick halt. However, when stock traders reconvened in New York on Friday (which was a Quadruple Witching Day), they took up right where they left off and carried the indexes solidly higher again with the tech-heavy NASDAQ leading the way once more, as dip-buyers emerged to scoop up some of the more battered names like Oracle, Broadcom and the rest.

I’m sorry to keep banging on about this, but I cannot emphasize it enough, especially after a week in which so much misinformation was being spread in the media (and on the likes of Fin-Tok FFS!) after the inflation numbers on Thursday.

No matter what this administration or the Kevin Hassetts of this world tell you, the Federal Reserve does NOT have the ability to lower the 10 year Treasury interest rate, upon which mortgage and other loan rates depend.

This rate is entirely determined by massive institutional bond traders, some of whom are considered to be vigilantes who may well have a tendency to sell bonds and thereby raise interest rates if they see what they view as irresponsible economic and fiscal policy combined with limited or no growth and/or elevated levels of inflation.

Case in point, since the Fed started cutting towards the tail end of 2024, the overnight Fed Funds Rate has been pushed down from 5.375% to 3.625% whereas the impactful 10 year Treasury rate is essentially no different now than it was then and actually moved higher following the most recent Fed rate cut just a week and a half ago.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

In bonds, many investors think they have a risk-free asset and are surprised when it turns out not to be. Understand your bond holdings.

.. AND I QUOTE ..

“Diversification is an explicit recognition of ignorance. And I view diversification not only as a survival strategy but as an aggressive strategy, because the next windfall might come from a surprising place. I want to make sure I’m exposed to it.”

Peter Bernstein, author, financial historian and economic consultant

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Consumer Cyclical (two biggest holdings: Tesla, Amazon) ⬆︎ 1.0% for the week

Last week’s worst performing US sector: Energy (two biggest holdings: Exxon-Mobil, Chevron) ⬇︎ 3.0% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 0.2% last week, is up 16.1% so far this year and ended the week 1.3% below its all-time record closing high (12/11/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 1.2% last week, is up 13.5% so far this year and ended the week 2.9% below its all-time record closing high (12/10/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 1.2% last week, is up 26.7% so far this year and ended the week 2.1% below its all-time record closing high (12/11/2025).

INTEREST RATES:

* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)

* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.62% (3.63% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.48% (3.52% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.70% (3.75% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.16% (4.19% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.77% (4.82% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.82% (4.85% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.21%

One week ago: 6.22%, one month ago: 6.25%, one year ago: 6.72%

Data courtesy of the Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be aft…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

The major highlight of the week was always going to be the final Federal Reserve meeting of the year and the Fed Funds Rate decision announcement with quarterly dot plots, followed by chairman Powell’s press conference on Wednesday afternoon ET, with the expected rate cut proclamation itself probably the least interesting part of the day.

The central bank’s rate-setting committee (FOMC) has forever claimed to be highly data-dependent but was data-deprived due to the backlog of inflation and labor market reports resulting from the recent government shutdown and operating in a fog to an extent, but still strongly fancied to make another 0.25% rate cut.

With the delayed most recent Jobs Report not out until later this week, there could be two very different scenarios whereby next weekend Fed committee members are either patting themselves on the back or kicking themselves, already regretting what they have done.

Bond markets continued to be twitchy. Medium and longer term interest rates remained stubbornly higher as bond vigilantes appear to be stirring in reaction to the increasingly disturbing economic, fiscal and inflation outlook, the prospect of an ever-widening national debt and a potentially reckless and incompetent Fed 2.0 response under a Hassett chairmanship starting in May. Also, the odds of another government shutdown as soon as January 31st are non-trivial and Wall Street is starting to pay attention.

All this uneasiness spilled over into stocks when New York opened on Monday as attention drifted from how the Fed will behave on Wednesday (that was pretty much a given and already priced in) to how it might behave in 2026 and the indexes slipped into the red, further delaying any Santa Claus rally and then remained in a holding pattern for the rest of the session to close a touch lower.

As the FOMC began its two-day conclave on Tuesday, interest rates steadied and stocks initially made small gains after better-than-anticipated job openings JOLTS data for October before later drifting back and finishing the day unchanged.

Fed Day dawned on Wednesday with stocks still feeling soggy and medium/longer term interest rates starting to creep higher again, despite the assumed overnight rate cut later that day. The impactful 10 year Treasury rate, below 4.00% just a couple of weeks earlier, briefly climbed back above 4.20%.

The predictable quarter point cut in the Fed Funds Rate to 3.625% duly arrived with two of the twelve committee members voting for no rate cut at all. The dot plots indicated a median assumption of just one rate cut in all of 2026. They also forecast little change in CPI inflation over the next twelve months, expected to still remain well above the Fed’s 2% target and a light increase in both the unemployment rate and GDP.

In his press conference, Powell implied that the Fed felt that it had got to a kind of sweet spot, having done enough with three cuts this year to bolster the economy and defend against labor market weakness while leaving rates high enough to combat a nasty rise in inflation.

Wall Street was impressed and the indexes closed nicely higher, led by interest rate-sensitive small caps and the Russell 2000 Small Cap Index reached a new all-time record high. Shorter term interest rates pulled back a little but longer term rates continued to shift doggedly higher.

Despite the Fed decision, the global trend of lowering interest rates appears to be grinding to a halt. Central banks in Europe, Japan, Canada, Australia and New Zealand are all expected to keep their rates unchanged or even raise them in early 2026.

The healthy vibes were quickly dealt a blow after the close with Oracle’s report showing exploding expenditure and a bad miss on Q3 revenue estimates and the share price crapped out in the after-market. The punishment got worse when the real markets opened on Thursday, badly infecting other AI giant names (and massively-weighted index fund components) like Nvidia and Broadcom and throwing cold water on the initial performance of the large cap indexes which opened weaker despite encouraging weekly Jobless Claims figures.

But that only served to trigger the dip-buying cavalry who rode to the rescue of almost everything (except Oracle and Broadcom) to propel the S&P 500 to another new all-time high by the closing bell.

But Friday turned into a rout for Big Tech and especially highly-valued AI stocks as we saw clear signs of a profit-taking rotation away from this year’s big winners. Oracle and Broadcom continued to get brutalized and the pain spread to the likes of AI heavyweights such as Nvidia, CoreWeave and AMD. Inevitably this led to a hefty index plunge, especially the NASDAQ which closed out a rather dismal week getting particularly pounded.

Concerns are growing about “circular funding” in AI-world. Simply put, these firms are saying to each other: “if you buy my products, I’ll buy your stock (financed by issuing bond debt) so that you can buy more of my products”. You don’t need to be a financial whiz to see how this could all end in tears.

Check out the Angles homepage for my new explainers on workplace benefits, new 401k/IRA contribution limits and tax brackets, HSAs, FSAs, BackDoor IRA and Mega BackDoor 401k contributions - all freshly updated for 2026.

You can download my guide to all the important 2026 numbers here:

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

An impossible task. 500 companies. 11 sectors. Trillions of dollars in market value. An uncertain world. Yet every December hundreds of Wall Street analysts try to imagine where the S&P 500 will be at the end of next year and actually publish their guesses so that we can all mock them when they inevitably get it all wrong. Given their poor track record, it’s unclear why they bother.

.. AND I QUOTE ..

“The cover of Forbes magazine does not celebrate poor investors who made good decisions but happened to experience the unfortunate side of risk. But it almost certainly celebrates rich investors who made OK or even reckless decisions and happened to get lucky. Both flipped the same coin that happened to land on a different side.”

Morgan Housel, author and co-founder of the Collaborative Fund

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Materials (two biggest holdings: Linde, Newmont) ⬆︎ 2.4% for the week

Last week’s worst performing US sector: Technology (two biggest holdings: Nvidia, Apple) ⬇︎ 2.0% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 0.6% last week, is up 16.3% so far this year and ended the week 1.2% below its all-time record closing high (12/11/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 1.2% last week, is up 14.9% so far this year and ended the week 1.7% below its all-time record closing high (12/10/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 0.3% last week, is up 28.3% so far this year and ended the week 0.8% below its all-time record closing high (12/11/2025).

INTEREST RATES:

* FED FUNDS RATE * ⬇︎ 3.625% (0.25% down from a week ago)

* PRIME RATE ** ⬇︎ 6.75% (0.25% down from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.63% (3.71% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.52% (3.56% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.75% (3.72% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.19% (4.15% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.82% (4.75% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.85% (4.79% …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

After seven straight months of S&P 500 gains for the first time since 2021 carrying the index back to within 1% of more new all-time highs, solid Black Friday sales and Chat GPT’s third birthday with the Mag 7 names up a collective 300% in that time, markets began December in risk-off mode with profit-taking in vogue.

Cryptocurrencies resumed their brutal plunge on Monday as the Chinese central bank warned against speculation, pulling crypto-related stocks down. The NASDAQ led stocks lower with Big Tech/AI under pressure again. The session ended with blood red across the board for equities and interest rates jumping higher, partly driven by significant rate rises in Japan to their highest levels there since 2008 and partly on growing Kevin Hassett concerns (see below).

A degree of calm returned to markets on Tuesday. Stocks drifted around in a narrow range for most of the day, closing marginally higher. The crypto destroyers took a day off and interest rates stabilized. It was still unclear if stock traders are truly having second thoughts about a traditional Santa Claus rally or whether they are just perhaps biding their time until later in the month.

Stocks marched north on Wednesday led by Small Caps and the indexes closed in the green again after the ADP employment report indicated continued weakness in the labor market in a relatively low hire/low fire environment, pretty much erasing any lingering doubts about a third Fed Funds Rate cut of the year later this week, albeit with an expected number of dissenting committee members.

The slightly better-than-anticipated pre-market weekly Jobless Claims report on Thursday still did little to challenge the narrative of labor market deterioration and resulting high confidence in a December rate cut. Stocks essentially flatlined all day, closing unchanged.

On what should have been a Jobs Report Friday (the most updated report now won’t be released until December 16th), all we got was a stale shutdown-delayed PCE inflation report for September. The out-of-date info implied an unchanged inflation rate stuck at around 3% which doesn’t hurt the chances of a Fed rate cut this week but could make more cuts in 2026 trickier as inflation is showing no signs of falling to anywhere near the Fed’s target rate of 2%.

A fourth straight day of gains saw the S&P 500 flirting with more new all-time record highs, but closed out the week just a little shy of the mark.

Bitcoin finally seemed to briefly attract some dip-buying last week after a frightful month. While definitely not a leading indicator for stocks, cryptocurrencies do trade pretty much exclusively on speculative money flows since the entire investment case for owning them is simply because you think someone else will pay more tomorrow than you did today. This differentiates the asset class from stocks which have actual measurable earnings and tangible value. So, while speculators will exit crypto well before stocks, an extended Bitcoin breakdown could be an early warning sign of a broader falling risk appetite. There are also early signs in last week’s rising interest rates (see INTEREST RATES below) that the bond markets are becoming wary that the assumed next Federal Reserve chairman Kevin Hassett may prove to be a spineless Trump glove puppet with a mission to demolish Fed independence from political pressure and advocate for relentless rate cuts on the instruction of the president, regardless of macro-economic and inflationary considerations.

He is already shamelessly lying to the public as part of his job audition, claiming on CBS last week that there are a number of states where average gas prices are below $2.00 per gallon. This is not even close to true and he knows it. According to the most recent official statistics, $2.41 is the lowest in the nation and the national average is $3.00. It was clearly part of a clumsy but deliberate attempt to mislead Americans when it comes to the inflation story.

Leading the US central bank requires really, really good judgement, a high level of trustworthiness, a grasp of real-world economic concerns, a passion for Fed independence and, most importantly, market credibility, respect and gravitas. Current chairman Powell has an abundance of all those qualities, but with Hassett we get literally none of them.

Bond traders will have their say on this one day and a substantial increase in medium and longer term interest rates could easily be the result even with a Fed that stubbornly pushes its own overnight lending rate lower and lower. Watch this space.

Check out the Angles homepage for my new explainers on workplace benefits, new 401k/IRA contribution limits and tax brackets, HSAs, FSAs, BackDoor IRA and Mega BackDoor 401k contributions - all freshly updated for 2026.

You can download my guide to all the important 2026 numbers here:

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

Why smart investors choose not to play Wall Street’s active management game. It’s staggeringly simple.

There are really only two reasons why you would want to play the game ..

.. AND I QUOTE ..

“Volatility is like a toll that investors pay on the road to attractive long-term returns.”

Jeff Buchbinder, LPL Financial chief equity strategist

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Technology (two biggest holdings: Nvidia, Microsoft) ⬆︎ 2.4% for the week

Last week’s worst performing US sector: Utilities (two biggest holdings: NextEra Energy, Constellation Energy) ⬇︎ 4.5% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 0.3% last week, is up 17.0% so far this year and ended the week 0.6% below its all-time record closing high (10/29/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 0.8% last week, is up 13.5% so far this year and ended the week 0.8% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 0.6% last week, is up 27.9% so far this year and ended the week 0.7% below its all-time record closing high (11/12/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 3.875% (unchanged from a week ago)

* PRIME RATE ** ⬌ 7.00% (unchanged from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.71% (3.88% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.56% (3.47% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.72% (3.59% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.15% (4.02% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.75% (4.62% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.79% (4.67% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.19%

One week ago: 6.23%, one month ago: 6.19%, one year ago: 6.69%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the final rate-setting meeting of the year on December 10th?

* Unchanged from now …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

As a rough November moved into the home stretch, the mood brightened for stocks as a holiday-shortened but data-packed week kicked off on Monday following a quiet weekend on the newswires.

A sense that there may be some relative bargains to be found in certain names among the rubble of Tech/AI after the recent bloodletting and rapidly rising hopes of another Fed Funds Rate cut next month pushed the indexes higher at the open. They then kept chugging forward as the day went on with the tech-heavy NASDAQ leading the way, in particular on the back of an outstanding session for both Broadcom and Google, the latter now having added a trillion dollars to its value in less than a month.

There was a big pre-market data dump on Tuesday although a good deal of it was already out-of date due to the shutdown. Retail Sales for September disappointed and PPI picked up in September from its August level, reflecting higher energy and food costs. Consumer confidence in how the economy is doing continues to nosedive according to the latest survey. There were also a bunch of smaller, more B-list retailers who released their earnings which were mixed, but appeared to confirm the developing K-Shaped economy narrative.

The overall gut-check from all this data was that a Fed Funds Rate cut on December 10th was becoming more likely but the major indexes initially struggled to get off the ground since their largest component stock, Nvidia, got slammed as Google appears to be showing signs of success in eating its lunch.

According to reports on Tuesday, Kevin Hassett is emerging as the front runner to succeed Powell as Fed chairman next year. Hassett is a loyal Trump foot-soldier with zero Federal Reserve experience, who in 2018 said that “US tax law was written by someone on acid” and would obediently and vigorously advocate for rate cuts on the instruction of the president.

Stocks responded positively to close nicely in the green on typical holiday-week low volume and interest rates sank with the 10 year Treasury rate (which has the greatest impact on mortgage rates) briefly dipping below 4.00%.

The buy Google/sell Nvidia trade finally eased on November’s final full day of trading on Wednesday and the indexes continued their recovery in the low volume environment. The Durable Goods and Weekly Jobless Claims reports were not particularly dial-movers, but the market-driven odds of a December Fed Funds Rate cut soared to 86% by the close, up from a low of 35% just a week earlier (see INTEREST RATE EXPECTATIONS below).

Stock markets went into the Thanksgiving holiday riding their best four-day winning streak for months and the S&P 500 up over 16% for the year. But it’s really important to note that the index has its very own K-Shaped economy going on under the hood with more than a third of its component stocks down 20% or more from their 2025 highs with the ten largest names (2% of the stocks in the index representing 40%+ of the weighting) doing all the heavy lifting until recently in terms of the positive annual index performance.

Turkey-stuffed stock traders returned to their posts early for an abbreviated three-and-a-half hour session on Friday and were immediately confronted with a major CME futures exchange outage that was thankfully fixed by the cash market open. They carried stocks higher again on microscopic volume to complete their best Thanksgiving week performance since 2008.

Having been down 4.5% at one point just eight days earlier, the S&P 500 finished the month slightly in the green and new all time-record highs were back in view, heading into Santa Claus rally-time. Interestingly, there were no big tech sector names anywhere to be seen in November’s top ten performing stocks, bucking the trend of the year so far.

Financial markets will likely face the following questions in December:

* Is AI enthusiasm shifting to AI skepticism?

* Does the Fed either announce a pause in rate cuts in December or dampen hopes for continued cuts in early 2026?

* Will backlogged economic data indicate a weaker-than-expected economy?

* Will the Supreme Court’s tariff decision inject fresh uncertainty into the economy?

The answers to these questions will determine how things shake out in the remaining weeks of 2025.

Check out the Angles homepage for my new explainers on workplace benefits, new 401k/IRA contribution limits and tax brackets, HSAs, FSAs, BackDoor IRA and Mega BackDoor 401k contributions - all freshly updated for 2026.

You can download my guide to all the important numbers for 2026 here:

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

“A home can be an important asset. But it can also be a bad financial investment, especially for the young.” Want to Buy a Home? It’s OK to Wait Till You’re 40 by Allison Schrager of Bloomberg.

.. AND I QUOTE ..

“Home buyers and sellers are living in different worlds now.”

Chen Zhao, head of economics research at Redfin

Home-sellers in the US are yanking listings off the market as the real estate sector stagnates. Nearly 85k sellers removed their properties in September alone.

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Consumer Cyclical (two biggest holdings: Amazon, Tesla) ⬆︎ 4.9% for the week

Last week’s worst performing US sector: Energy (two biggest holdings: Exxon-Mobil, Chevron) ⬆︎ 1.2% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 3.7% last week, is up 16.6% so far this year and ended the week 0.9% below its all-time record closing high (10/29/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 5.6% last week, is up 12.6% so far this year and ended the week 1.6% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 2.8% last week, is up 27.2% so far this year and ended the week 1.3% below its all-time record closing high (11/12/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 3.875% (unchanged from a week ago)

* PRIME RATE ** ⬌ 7.00% (unchanged from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.88% (3.90% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.47% (3.51% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.59% (3.62% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.02% (4.06% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.62% (4.67% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.67% (4.71% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.23%

One week ago: 6.26%, one month ago: 6.18%, one year ago: 6.81%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the final rate-setting meeting of the year on December 10th?

* Unchanged from now .. ⬇︎ 14% probability (31% a week ago)

* 0.25% lower than now .. ⬆︎ 86% probability (69% a week ago)

Data courtesy of CME FedWatch Tool

All data based on the Fed Funds interest rate (currently 3.875%…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com