“Not with a bang, but with a whimper.“

T.S. Eliot said “This is the way the World ends” in 1925 about the fall of the British Empire – post World War I and pre World War II. It was his follow-up poem to “Wasteland“, which he had written 3 years earlier – the 100 years-ago version of a long-awaited blockbuster sequel.  

And, for those who complain that it takes them 8 years to make another “Incredibles” movie – keep in mind that T.S. Eliot wrote just 98 lines in 3 years – and he was considered the best writer we had! Do they even teach poetry anymore? Is it a thing?  

As to the markets, there’s not a whole lot going on this morning as it’s still holiday time in the US (and most of the World). Dow, S&P 500, and Nasdaq futures are all down about 0.3% in pre-market trading, indicating a potentially soft open. This follows a mixed performance from major indexes on Thursday as the holiday rally lost some steam. 

The 10-year Treasury yield are still over 4.6%, which could put pressure on stocks, especially growth and technology names while also hurting the housing market and, of course, indicating the Fed is losing control of rate policy as the US’s likely $39Tn debt level by the end of next year is raising all sorts of red flags among people who understand Math and Economics – not of which are in the incoming Administration, unfortunately.  

Instead Trump plans to give people in his tax bracket another $1Tn of tax breaks, running next year’s deficit over $3Tn and greatly raising the US’s risk of default to the point where we may lose our credit rating by mid-year. Meanwhile, the Nasdaq is not trading at 38x next year’s projected earnings and those earnings are very likely to be modified downwards in the Q4 Earnings Reports – what a fun way to begin 2025!  

At least we can always count on AAPL to continue taking over the World – their market cap is just under $4,000,000,000,000 and that ties with the GDP of India and Japan, making Apple, Inc. the World’s 4th most powerful nation – soon to have 2.5Bn AI citizens living in your phones!  

BitCoin ($2Tn) meanwhile, has dropped back to $96,600 and has very little support above $80,000 as it ran up purely on expectations that Trump would be promoting it but, as people dig a little deeper – they keep realizing how unsuitable BTC is as a serious currency (have you or anyone you know EVER bought something with BTC?) – it’s more of a collectors item and will one day be found in a box – next to your Beanie Babies.

Beyonce was a a big hit for NFLX yesterday (there was also some football) with 24M viewers tuning into both games – setting records for live streaming audiences. NFLX is trading at 40x next year’s earnings at $950 so we’ll see if that’s tolerated and, if so, the Nasdaq may have a chance to go higher but 38x is kind of ridiculous when a 10-year note pays 4.6% vs, effectively, 2.6% in the market. 

I’ll be back in the command center next week where we’ll be looking back on 2024 and looking ahead to 2025 – should be fun!

Have a great weekend, 

• Phil