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Bitcoin smashing the $100,000 barrier raises the prospect of the cryptocurrency going mainstream
U.S. consumer price inflation (CPI) data for November will show how much pressure there is on the Fed to adjust policy rates, and
Central banks in Europe, Brazil, and Australia meet
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Bitcoin Breaks Above $100K.
There was something inevitable in Bitcoin's record surge past $100,000 after Trump's election promises to make America "the crypto capital of the planet.”
But it did so in resounding fashion, vaulting from below $99,000 to as high as $103,619 in the space of two hours before catching its breath. The catalyst may have been confirmation of Trump's choice of crypto veteran Paul Atkins to run the SEC.
Of course, $100,000 is just a number — but one the faithful and the skeptical regard as a major milestone in Bitcoin's 16-year journey towards legitimacy.
Recall though that its history is written in breathless rallies and white-knuckle reversals. While numbers like $150,000 are already being mentioned for 2025, the token is flashing overbought on daily, weekly, monthly and quarterly charts.
(2) On Wednesday at 8:30 am ET, the November U.S. Consumer Price Inflation (CPI) Numbers Come Out.
Markets gaming out the trajectory for Federal Reserve policy in the months ahead get a U.S. inflation reading on Wednesday.
The Fed has shaved 75 basis points (bps) off interest rates since September, following months of cooling inflation; expectations are towards another 25-bps cut later in December.
But the path ahead is less clear. The economy has proved stronger than expected, and Fed Chair Jerome Powell has said there is little reason to hurry the pace of cuts.
A strong number could bolster that view, potentially reigniting a bond selloff and strengthening the dollar if investors decide to further unwind bets on how much the Fed will cut next year.
Economists polled by Reuters expect consumer prices to have risen +0.2% in November — matching the October rise.
(3) On Thursday, the European Central Bank (ECB) Meets. A 4th Policy Rate Cut is Expected.
For ECB policymakers, their last meeting in October must seem a lifetime ago.
Since then, Donald Trump's U.S. election win means the euro area faces renewed economic pain with likely tariffs, and governments in heavyweight Germany and France have collapsed, with the latter engulfed in its second political crisis in six months.
All that has dealt a blow to sentiment in a bloc where business activity is deteriorating — and the euro has slid.
The ECB, also no stranger to hard times, is expected to deliver its fourth quarter-point rate cut on Thursday, with more cuts anticipated.
A pick-up in inflation means a bigger rate cut is unlikely. And yes — you guessed it — ECB Chief Christine Lagarde will likely stress caution and data-dependency.
(4) On Wednesday, Brazil’s Central Bank Meets. The Last Meeting for this Governor.
Brazil's central bank holds its final meeting under Governor Roberto Campos Neto on Wednesday, with bets on a sharper 75 bps hike after two raises that brought rates to 11.25%.
Campos Neto, set to hold a news conference on Dec. 19, said a positive fiscal shock could relieve pressure on the exchange rate and long-term yields in Latin America's largest economy.
But the government's widely anticipated fiscal package disappointed markets, driving up risk premiums on major assets.
Brazil's currency, the real, has weakened some 20% against the dollar year-to-date, and strong economic resilience — on display in the third quarter — is fueling inflation worries.
As policymakers grapple with mounting challenges, Congress debates measures to curb spending and contain debt growth.
(5) On Tuesday, the Reserve Bank of Australia (RBA) Meets.
Australia's central bank, which meets on Tuesday, is in a tight spot.
The economy is sputtering, the currency is at four-month lows and yet inflation is sufficiently persistent to make repeated rate cuts unlikely.
The chances of a quarter-point reduction are below 15%, and rates are expected to take until July to fall even 50 bps.
The Bank of Canada, by contrast, looks set to answer investors' wishes for more cuts. It has said inflation is a thing of the past and more cuts could be in the offing, leaving the market split on whether its Dec. 11th meeting will yield a 25- or even a 50-bps cut.
Enter the most dovish of the G10 central banks: the Swiss National Bank. With inflation at +0.7%, it is expected to cut rates by 50 bps on Dec. 12th.
Zacks #1 Rank (STRONG BUY) Stocks
I chose one hot Retail Apparel & Shoe stock, and two Alternative Finance Stocks.
(1) Deckers Outdoor (DECK - Free Report) : This is a $201 a share U.S. Retail Apparel and Shoe industry stock. The market capitalization is $26B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Founded in 1973 and headquartered in Goleta, California, Deckers Outdoor Corporation is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities.
The company sells products primarily under five proprietary brands — UGG, HOKA, Teva, Sanuk and Other brands (mainly comprised of Koolaburra).
Its products are sold through specialty domestic retailers, international distributors and directly to end-users through its websites and catalogs. The company sells directly to global consumers through the Direct-to-Consumer (DTC) channel, which is comprised of e-commerce websites and retail stores.
The brands are sold worldwide, including in the United States, Canada, Europe, Asia-Pacific and Latin America.
The UGG brand (52.2% of fiscal 2024 total revenues) has proven to be a highly resilient line of premium footwear, apparel and accessories with expanded product offerings. The company intends to continue diversifying the brand to drive year-round product sales through the expansion of women’s spring and summer footwear, men’s products and apparel, home goods and accessories.
The HOKA brand (42.1% of fiscal 2024 total revenues) is an authentic, premium line of year-round performance footwear, apparel and accessories.
The Teva brand’s product line (3.5% of fiscal 2024 total revenues) includes a range of performance, casual, footwear and trail lifestyle products.
The Sanuk brand (0.6% of fiscal 2024 total revenues) has manifested into a lifestyle brand with a presence in the relaxed casual shoe and sandal categories.
The company's Other brands (1.6% of fiscal 2024 total revenues) is a casual footwear fashion line using sheepskin and other plush materials.
Deckers completed the sale of its Sanuk brand back in August.
(2) Synchrony Financial (SYF - Free Report) : This is a $67 a share U.S. Financial-Miscellaneous Services industry stock. The market capitalization is $30.5B. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Synchrony Financial, one of the nation’s premier consumer financial services companies, offers a wide range of credit products through a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and health and wellness providers.
Synchrony Financial focuses on generating financial flexibility for its customers by offering private label credit cards, Dual Card, and general purpose co-branded credit cards, promotional financing and installment lending, and loyalty programs.
Although the company operates via a single business segment, it offers its credit products primarily through five sales platforms: Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle.
These platforms, offering comprehensive payment and financing solutions, are organized by the types of products and the partners the company works with. SYF’s total interest and fees on loans amounted to $5.3 billion for 2023.
Home & Auto (accounted for 26% the company’s total interest and fees on loans for 2023): This platform is a leading solutions provider through partners and merchants delivering home and automotive merchandise and services.
Digital (30%): This platform provides solutions via partners and merchants aiming to connect with consumers through digital channels.
Diversified & Value (23%): This platform offers solutions through partners and merchants providing a varied assortment of merchandise.
Health & Wellness (16%): This platform provides solutions intended to benefit those looking for availing health and wellness care for one’s own self as well as for their families and pets.
Lifestyle (5%): This platform delivers solutions via partners and merchants for helping those who provide merchandise in power sports, outdoor power equipment, and other industries such as sporting goods, apparel, jewelry and music.
Corporate: The platform encompasses activity and balances linked with specific program agreements with retail partners and merchants, which will either be not renewed beyond their current expiry date or else not manage managed within the abovementioned five sales platforms.
(3) Brookfield Asset Management (BAM - Free Report) : This is a $58 a share U.S. Financial-Miscellaneous Services industry stock. The market capitalization i s $24.3B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Brookfield Asset Management Inc. is an alternative asset manager with assets under management across real estate, infrastructure, renewable power and transition, private equity and credit.
It offers a range of alternative investment products to investors including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors.
Brookfield Asset Management Inc. is based in Toronto, Canada.
Key Global Macro
Wednesday’s U.S. CPI print should be the major stock trader focus.
On Monday, Mainland China’s CPI for NOV comes out. The consensus CPI is for a weak +0.5% y/y, up from an even weaker +0.3% y/y prior reading.
The consensus PPI for Mainland China is looking for -2.8% y/y deflation. The prior PPI reading was -2.9% y/y deflation. Not looking good!
On Tuesday, the Reserve Bank of Australia (RBA) issues its interest rate decision. The current policy rate at 4.35% is not expected to change. There is a presser.
On Wednesday, the U.S. CPI for NOV comes out. The core CPI number will update from a +3.3% y/y prior number. The broad CPI should tick up to +2.7% y/y in NOV, from +2.6% y/y.
The Bank of Canada (BoC) should cut its policy rate 50-bps to 3.25% from 3.75%.
On Thursday, the European Central Bank (ECB) should cut its main refi rate 25-bps to 3.15% from 3.40%.
On Friday, Japanese industrial production for OCT comes out. I see a declining -2.6% y/y prior reading.
Eurozone industrial production for OCT also comes out. I see a declining -2.8% y/y prior reading.
Conclusion
Here are Zacks Research Director Sheraz Mian’s five Q4 earnings points:
This came out December 4th, 2024.
(1) For Q4-24, total S&P500 earnings are currently expected to be up +7.5% from the same period last year, on +4.7% higher revenues.
(2) Earnings estimates for the period have steadily come down since the quarter got underway, with the current +7.5% growth rate down from +9.8% in early October.
(3) Q4-24 earnings are expected to be above the year-earlier level for 9 of the 16 Zacks sectors, with:
Medical (earnings growth of +16%)
Tech (+14.5%)
Finance (+10.7%), and
Utilities (+9.1%) as the sectors enjoying significant earnings growth
(4) Q4-24 earnings are expected to be below the year-earlier level for 7 of the 16 Zack sectors, with:
Energy (earnings decline of -20.7%)
Aerospace (-17.9%), and
Conglomerates (-14.3%) as the notable decliners
(5) Zacks expect Q4-24 earnings for the ‘Magnificent 7’ group of companies to be up a strong +20.5% from the same period last year, on strong +12.2% higher revenues.
Exclude that critical ‘Mag 7’ earnings growth contribution?
Q4-24 earnings for the rest of the S&P500 index would be up only +3.6% (versus +7.5%).
That’s it for me.
Have an excellent trading week!
Warm Regards,
John Blank, PhD. Zacks Chief Equity Strategist and Economist
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Bitcoin Breaks $100K: Global Week Ahead
What’s going on in the Global Week Ahead?
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Bitcoin Breaks Above $100K.
There was something inevitable in Bitcoin's record surge past $100,000 after Trump's election promises to make America "the crypto capital of the planet.”
But it did so in resounding fashion, vaulting from below $99,000 to as high as $103,619 in the space of two hours before catching its breath. The catalyst may have been confirmation of Trump's choice of crypto veteran Paul Atkins to run the SEC.
Of course, $100,000 is just a number — but one the faithful and the skeptical regard as a major milestone in Bitcoin's 16-year journey towards legitimacy.
Recall though that its history is written in breathless rallies and white-knuckle reversals. While numbers like $150,000 are already being mentioned for 2025, the token is flashing overbought on daily, weekly, monthly and quarterly charts.
(2) On Wednesday at 8:30 am ET, the November U.S. Consumer Price Inflation (CPI) Numbers Come Out.
Markets gaming out the trajectory for Federal Reserve policy in the months ahead get a U.S. inflation reading on Wednesday.
The Fed has shaved 75 basis points (bps) off interest rates since September, following months of cooling inflation; expectations are towards another 25-bps cut later in December.
But the path ahead is less clear. The economy has proved stronger than expected, and Fed Chair Jerome Powell has said there is little reason to hurry the pace of cuts.
A strong number could bolster that view, potentially reigniting a bond selloff and strengthening the dollar if investors decide to further unwind bets on how much the Fed will cut next year.
Economists polled by Reuters expect consumer prices to have risen +0.2% in November — matching the October rise.
(3) On Thursday, the European Central Bank (ECB) Meets. A 4th Policy Rate Cut is Expected.
For ECB policymakers, their last meeting in October must seem a lifetime ago.
Since then, Donald Trump's U.S. election win means the euro area faces renewed economic pain with likely tariffs, and governments in heavyweight Germany and France have collapsed, with the latter engulfed in its second political crisis in six months.
All that has dealt a blow to sentiment in a bloc where business activity is deteriorating — and the euro has slid.
The ECB, also no stranger to hard times, is expected to deliver its fourth quarter-point rate cut on Thursday, with more cuts anticipated.
A pick-up in inflation means a bigger rate cut is unlikely. And yes — you guessed it — ECB Chief Christine Lagarde will likely stress caution and data-dependency.
(4) On Wednesday, Brazil’s Central Bank Meets. The Last Meeting for this Governor.
Brazil's central bank holds its final meeting under Governor Roberto Campos Neto on Wednesday, with bets on a sharper 75 bps hike after two raises that brought rates to 11.25%.
Campos Neto, set to hold a news conference on Dec. 19, said a positive fiscal shock could relieve pressure on the exchange rate and long-term yields in Latin America's largest economy.
But the government's widely anticipated fiscal package disappointed markets, driving up risk premiums on major assets.
Brazil's currency, the real, has weakened some 20% against the dollar year-to-date, and strong economic resilience — on display in the third quarter — is fueling inflation worries.
As policymakers grapple with mounting challenges, Congress debates measures to curb spending and contain debt growth.
(5) On Tuesday, the Reserve Bank of Australia (RBA) Meets.
Australia's central bank, which meets on Tuesday, is in a tight spot.
The economy is sputtering, the currency is at four-month lows and yet inflation is sufficiently persistent to make repeated rate cuts unlikely.
The chances of a quarter-point reduction are below 15%, and rates are expected to take until July to fall even 50 bps.
The Bank of Canada, by contrast, looks set to answer investors' wishes for more cuts. It has said inflation is a thing of the past and more cuts could be in the offing, leaving the market split on whether its Dec. 11th meeting will yield a 25- or even a 50-bps cut.
Enter the most dovish of the G10 central banks: the Swiss National Bank. With inflation at +0.7%, it is expected to cut rates by 50 bps on Dec. 12th.
Zacks #1 Rank (STRONG BUY) Stocks
I chose one hot Retail Apparel & Shoe stock, and two Alternative Finance Stocks.
(1) Deckers Outdoor (DECK - Free Report) : This is a $201 a share U.S. Retail Apparel and Shoe industry stock. The market capitalization is $26B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Founded in 1973 and headquartered in Goleta, California, Deckers Outdoor Corporation is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities.
The company sells products primarily under five proprietary brands — UGG, HOKA, Teva, Sanuk and Other brands (mainly comprised of Koolaburra).
Its products are sold through specialty domestic retailers, international distributors and directly to end-users through its websites and catalogs. The company sells directly to global consumers through the Direct-to-Consumer (DTC) channel, which is comprised of e-commerce websites and retail stores.
The brands are sold worldwide, including in the United States, Canada, Europe, Asia-Pacific and Latin America.
The UGG brand (52.2% of fiscal 2024 total revenues) has proven to be a highly resilient line of premium footwear, apparel and accessories with expanded product offerings. The company intends to continue diversifying the brand to drive year-round product sales through the expansion of women’s spring and summer footwear, men’s products and apparel, home goods and accessories.
The HOKA brand (42.1% of fiscal 2024 total revenues) is an authentic, premium line of year-round performance footwear, apparel and accessories.
The Teva brand’s product line (3.5% of fiscal 2024 total revenues) includes a range of performance, casual, footwear and trail lifestyle products.
The Sanuk brand (0.6% of fiscal 2024 total revenues) has manifested into a lifestyle brand with a presence in the relaxed casual shoe and sandal categories.
The company's Other brands (1.6% of fiscal 2024 total revenues) is a casual footwear fashion line using sheepskin and other plush materials.
Deckers completed the sale of its Sanuk brand back in August.
(2) Synchrony Financial (SYF - Free Report) : This is a $67 a share U.S. Financial-Miscellaneous Services industry stock. The market capitalization is $30.5B. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Synchrony Financial, one of the nation’s premier consumer financial services companies, offers a wide range of credit products through a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and health and wellness providers.
Synchrony Financial focuses on generating financial flexibility for its customers by offering private label credit cards, Dual Card, and general purpose co-branded credit cards, promotional financing and installment lending, and loyalty programs.
Although the company operates via a single business segment, it offers its credit products primarily through five sales platforms: Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle.
These platforms, offering comprehensive payment and financing solutions, are organized by the types of products and the partners the company works with. SYF’s total interest and fees on loans amounted to $5.3 billion for 2023.
(3) Brookfield Asset Management (BAM - Free Report) : This is a $58 a share U.S. Financial-Miscellaneous Services industry stock. The market capitalization i s $24.3B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Brookfield Asset Management Inc. is an alternative asset manager with assets under management across real estate, infrastructure, renewable power and transition, private equity and credit.
It offers a range of alternative investment products to investors including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors.
Brookfield Asset Management Inc. is based in Toronto, Canada.
Key Global Macro
Wednesday’s U.S. CPI print should be the major stock trader focus.
On Monday, Mainland China’s CPI for NOV comes out. The consensus CPI is for a weak +0.5% y/y, up from an even weaker +0.3% y/y prior reading.
The consensus PPI for Mainland China is looking for -2.8% y/y deflation. The prior PPI reading was -2.9% y/y deflation. Not looking good!
On Tuesday, the Reserve Bank of Australia (RBA) issues its interest rate decision. The current policy rate at 4.35% is not expected to change. There is a presser.
On Wednesday, the U.S. CPI for NOV comes out. The core CPI number will update from a +3.3% y/y prior number. The broad CPI should tick up to +2.7% y/y in NOV, from +2.6% y/y.
The Bank of Canada (BoC) should cut its policy rate 50-bps to 3.25% from 3.75%.
On Thursday, the European Central Bank (ECB) should cut its main refi rate 25-bps to 3.15% from 3.40%.
On Friday, Japanese industrial production for OCT comes out. I see a declining -2.6% y/y prior reading.
Eurozone industrial production for OCT also comes out. I see a declining -2.8% y/y prior reading.
Conclusion
Here are Zacks Research Director Sheraz Mian’s five Q4 earnings points:
This came out December 4th, 2024.
(1) For Q4-24, total S&P500 earnings are currently expected to be up +7.5% from the same period last year, on +4.7% higher revenues.
(2) Earnings estimates for the period have steadily come down since the quarter got underway, with the current +7.5% growth rate down from +9.8% in early October.
(3) Q4-24 earnings are expected to be above the year-earlier level for 9 of the 16 Zacks sectors, with:
(4) Q4-24 earnings are expected to be below the year-earlier level for 7 of the 16 Zack sectors, with:
(5) Zacks expect Q4-24 earnings for the ‘Magnificent 7’ group of companies to be up a strong +20.5% from the same period last year, on strong +12.2% higher revenues.
Exclude that critical ‘Mag 7’ earnings growth contribution?
Q4-24 earnings for the rest of the S&P500 index would be up only +3.6% (versus +7.5%).
That’s it for me.
Have an excellent trading week!
Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist