Stocks closed mostly higher yesterday with only the Dow missing out. But the gains were led by big tech, with the Nasdaq up by 1.77%, and making a new all-time high in the process.

Alphabet (Google) soared by 5.52% yesterday, after being up 5.59% on Tuesday. This was in response to their surprise announcement on Monday that they developed a quantum computing chip (called Willow) that completed a computing task in 5 minutes that would take current supercomputers 10 septillion years to do. (An unfathomable number.) Long story short, it's still years away for practical use. But the excitement was that Alphabet could become the leader in quantum computing. Just as people were starting to wonder if they were being left behind with AI.

Yesterday, Apple released their AI features for iOS 18.2, which will bring the service to iPhone, iPad and Mac users. But only those with the latest versions. They did not get the lift that Google got. But Apple has been rallying for weeks on the expected announcement. Now it's finally here. And you can be sure plenty of users will race to upgrade their older devices for newer ones to get access.

Tesla is a car company, but they're also considered a tech company as well. They jumped 5.93% yesterday, and made a new all-time high. TSLA, a major bitcoin holder, has rallied 69% since the election.

Yesterday's Consumer Price Index (CPI ? retail inflation) came in as expected with headline inflation up 0.3% m/m vs. last month's 0.2%, and the y/y rate at 2.7% vs. last month's 2.6%. The core rate (ex-food & energy) also came in as expected with the monthly change at 0.3%, the same as last month. And the y/y rate at 3.3%, also the same as last month.

While yesterday's report shows progress on inflation remains stalled at best, the market, nevertheless, breathed a sigh of relief. That's because it came in as expected. And that leaves the door open for the Fed to cut rates next week (12/18).

In fact, Fed Funds traders, via the CME's FedWatch tool, now puts the likelihood of a 25 basis point rate cut at 98.6%, up from Tuesday's 86.0%.

Although, we will get another look at inflation this morning with the Producer Price Index (PPI ? wholesale inflation) report. The headline number is expected to be up 0.3% vs. last month's 0.2%, while the y/y rate is expected to be up 2.6% vs. last month's 2.2%. The core rate is expected to be up 0.2% m/m vs. last month's 0.3%. The y/y rate is expected to be up 3.2% vs. last month's 2.2%.

That would be a larger increase on both accounts than the CPI. And it would make for two months in a row of increases. We'll see what it says. An as-expected reading would be fine. But a better-than-expected reading would be better.

In other news, yesterday's MBA Mortgage Applications were up 5.4% w/w with purchases down -4.1% and refi's up 27.2%.

In addition to the PPI report today, we'll also get Weekly Jobless Claims, and the Quarterly Services Survey.

Counting today, there's 2 weeks and 4 trading days left in the year. It's been a spectacular year so far for all of the indexes.

And with Q4 being the best quarter of the year, not to mention all of the other things going right for the economy and the market, I expect to finish the year on an even stronger note.

See you tomorrow,