Stocks closed modestly lower yesterday.

Big-tech was the drag. But it has led the rally this year. And a little bit of profit taking should not be overly surprising.

NVIDIA, which has essentially become the face of the AI-trade, is up 40.2% this year, while the S&P is up 17.4% and the Nasdaq is up 21.6%. (NVIDIA, however, was 'only' down -1.21% yesterday.)

Adding to the weakness was an increase in margin requirements for gold and silver futures, along with platinum and palladium. Silver, for example, which has soared by nearly 150% this year, saw initial margin requirements rise by 25%, and maintenance margins rise by roughly 13%.

Granted, that's for futures. But a fair share of investors trade in both futures and equities. And those requirements can pressure current holdings and new investments.

But I see the aforementioned items as short-term things, as there's a compelling story for precious metals. And the AI boom is here to stay!

In other news, the Pending Home Sales Index rose 3.3% m/m vs. last month's upwardly revised 2.4% pace (originally 1.9%), and views for 0.8%. The Index itself came in at 79.2 vs. last month's 76.7.

Today we'll get the Case-Shiller Home Price Index, the FHFA House Price Index, and the Chicago PMI.

We'll also get the FOMC Minutes from earlier this month's FOMC Meeting.

You'll recall, the Fed meeting on 12/10 saw the Fed lower rates by a quarter point, as expected. But there was some disagreement. While 9 of the 12 voting members opted for a 25 bps cut, two wanted no cut, and one wanted a half-point cut. We might get some further insight on that.

Additionally, the Fed updated their Summary of Economic Projections (SEP), which they do only 4 times a year.

They increased their 2025 GDP forecast to 1.7% from 1.6% back in September. For 2026 it rose to 2.3% from 1.8%. For 2027 it was upped to 2.0% from 1.9%. And 2028 was increased to 1.9% from 1.8%.

Their unemployment rate estimate for 2025 was steady at 4.5% vs. September's outlook. For 2026 it was steady at 4.4%. 2027 was reduced to 4.2% from 4.3%. And 2028 was steady at 4.2%.

PCE core Inflation forecasts for 2025 were lowered to 3.0% vs. 3.1% from September. 2026 is pegged at 2.6%. 2027 was put at 2.2%. And 2028 was at 2.0%.

And the Fed Funds rate projections were unchanged from September at 3.6% for 2025, 3.4% for 2026, 3.1% for 2027, and 3.1% for 2028. Their longer run rate was also steady at 3.0%.

In short, the dot plot is forecasting one 25 basis point rate cut in 2026 (unchanged from earlier estimates), and one cut in 2027, also in line with previous forecasts. But that too saw various members envision the path differently. The minutes could shed more insight on that too.

Just 2 more days left in the year.

Will we see more upside before the year comes to a close?

There's still time to see the S&P finish up with 20% (or more) for the year. But it'll have to be a strong 2 days.

But even if we finished where we are right now, it would still rate as another stellar year as the Dow is up 13.9%; the S&P is up 17.4%; the Nasdaq is up 21.6%; and the small-cap Russell 2000 is up 12.9%.

And I'm expecting another year of big gains for 2026!

See you tomorrow,