The S&P 500 and NASDAQ 100 briefly traded below their 50-day moving averages on Friday, shaking out weak hands before reclaiming this key institutional support level—a classic, healthy pullback. Big money stepped in during the dip, taking advantage of the temporary dislocation.
The market’s biggest concern is the Fed’s hawkish tone. Investors had been expecting a December rate cut, but recent comments suggest that may be off the table. With consumer spending—70% of GDP—potentially slowing and AI-driven job displacement on the horizon, the risk of weakening demand is real. If the recent government shutdown shaved GDP growth, we could see rising unemployment alongside still-elevated prices. In that scenario, the Fed may be forced to err on the side of lower rates, which carries inflation risk and the possibility of a stagflationary backdrop.
One potential pressure valve: declining rents could soften CPI data on Thursday. Holiday spending may also provide a psychological lift to the market.
My largest positions remain gold and silver. With $38 trillion in national debt and rising deficits, the Fed will likely need to print more money over time—diluting the dollar and supporting hard assets. Global central banks continue to accumulate gold as a currency hedge, and with the U.S. approaching the 250-year mark as a global superpower, it’s prudent not to assume the dollar’s reserve status is permanent. I try to invest where the puck is going—not where it’s been.
On the AI front, OpenAI’s circular investment expectations have raised concerns about valuation excesses reminiscent of the 2000 bubble. But I believe this time is different because many AI-linked companies are posting real, accelerating earnings and sales. We’re not seeing the reckless IPO surge or takeover frenzy that preceded the dot-com collapse.
Crypto is telling a different story. Bitcoin has sliced below both its 50- and 200-day moving averages, while Ethereum tests its own 200-day moving average. The speculative unwind in crypto may rotate into AI and biotech. With over 100% short interest in some biotech ETFs, I’m watching for accelerating fundamentals that could fuel a meaningful short squeeze.
Bonds didn’t enjoy a flight-to-safety bid during the recent equity weakness, another signal that the broader bull market remains intact and likely to continue trading within its up-trending channel.
Housing remains tight. Foreclosure starts are up 20% from last year, and discussions about 50-year mortgages are increasing. Immigration has likely contributed to the supply shortage. Meanwhile, Trump is floating ideas like penalty-free 401(k) borrowing and enhanced mortgage tax credits.
Bottom line: I remain bullish. The indexes reclaimed their 50-day moving averages exactly as I had hoped, and December is historically a strong month for equities. Markets have their shocks and aftershocks, but over time, they tend to give more than they take.
Stock Model (aggressive): ARGX, AVGO, BIL, CLS, CRDO, CRWD, DY, ESLT, INCY, LITE, MEDP, PHYS, PLTR, PSLV, PWR, SHOP, SNOW, STX, TSLA, VEEV, VRT, ZS
BRI Model (Biblically Responsible Investing): AVGO, BIL, CLS, CRDO, DY, ESLT, INCY, MEDP, PHYS, PLTR, PSLV, PSTG, PWR, SNOW, TSM, VRT, ZS
Fund Model (conservative): AGEYX, CBYYX, NPSRX, PHYS, PSLV
(Horizon’s Model Allocations may change at any time. For informational purposes only and not investment advice.)
The Lord goes before you, and he will never leave you nor forsake you. Deuteronomy 31:8