November's price action has fallen short of expectations for the broader market.
After a volatile month.
It's up to the Bulls to prove they can stay strong.
Now Bitcoin wiped out all its year to date gains, and hot IPOs have cooled off, and the S&P 500 remains in the red for November.
Yesterday renewed optimism that the markets can push higher, stocks rising along with December rate cut odds, which continue to trek higher.
Well, joining me this morning to weigh in is Luke Lloyd.
President and CEO of Lloyd Financial Group.
Well, great to have you here.
Thank you so much for joining me in the New York Stock Exchange.
Well, it's hard to believe, but we're counting down to year end, and Thanksgiving is right around the corner.
So what do you make of the equity market performance so far in 2025?
I can't believe we're already in November, December time.
I mean, I feel like I'm getting old.
Like I really do.
Look, we go back throughout the past few months.
The market didn't start having some issues until liquidity started coming out of the system.
And frankly, the liquidity stemmed from two things.
The first one being the government shutdown.
OK, if you look back throughout history, specifically the 2018 to 2019 government shutdown, there's only about a 0.3% negative hit on GDP because of the lack of liquidity and the lack of funding in the government.
This time around it's actually projected that we're going to lose about 1% of GDP because it was over 40 days.
We're more reliant on the government than we were in 2018 and 2019.
If you look back in history too with the stock market.
That 1% contraction usually correlates to about 5 to 8% negative, you know, top to bottom correction in the stock market.
Where were we at just last week?
The Nasdaq was 8% top to bottom.
So the second part was the Federal Reserve becoming a little bit more hawkish, right?
The chance of the December cut kind of became 50/50 last week.
We're now like at 80%, so it's more likely now, but Uh, with December, liquidity coming back in the system, government shutdown, Federal Reserve getting a little bit more dovish now.
Fed Waller, or not, Fed member Waller being a little bit more dovish yesterday, and then quantitative tightening ending December 1st.
I think this is a really bullish set up as we head into the holiday shopping season in December.
Yeah, and speaking of which, we're paying attention to the American consumer as we head into Black Friday, Cyber Monday, and of course the month of December.
But as you mentioned, we are paying attention to Fed rate cut expectations and right now we are looking at an 85% chance of a 25 basis point cut, even higher than I thought it was quite a stark contrast to where we were last week.
So based on the latest economic data we got earlier today, what do you make of the? and of course we're looking ahead to 2026.
So what do you expect from the central bank?
Well, I think we're going to get 25% in December.
I think that's that's now a given.
It's not obviously 100%, but I think that's very likely.
If you remember about a year ago, I think November, December, I probably was sitting here about a year ago with you and we were talking about the rate cut expectations heading into 2025, and I think that the rate cut expectations were like 3 or 4 maybe 5 even at some point so the end of last year.
We only got, you know, what.
So far I think this is the 3rd coming up in December if we get it, so you know it's hard to predict exactly what's going to happen.
I would say we probably get 2 or 3 rate cuts next year because the economy is remaining strong.
We look at 3 things inflation, growth and liquidity.
I don't think inflation is an issue anymore.
Growth still remains pretty strong.
We do have that 1% negative contraction in GDP for Q4, but I think next year we're projecting about 2% GDP growth here in America, which is still really good.
So I think a lot of it is pointing to buy those higher beta stocks.
We added higher beta last week.
Uh, we added OWL, an asset management firm.
We added Take-Two Interactive, TTWO, which is GTA 6.
I don't game anymore.
I used to game, but yeah, they're a little bit more higher beta stocks and then bullish and circle would be dollar cost averaging in for some of our clients that are especially younger or taking on a little bit more risk.
They have new money coming in every single week or every single month.
Yeah, and Luke, finally, before I let you go, you mentioned liquidity, so I do have to ask you about the crypto market because here we are heading into December.
We are Looking at Bitcoin right around the 86 900 level.
So that's a stark contrast to where it was in October when we saw record highs at 126,000.
And here we are looking at Bitcoin in negative territory.
So tell us about this by the mentality.
Yeah, so I have a little what's it called, vendetta with Bitcoin, right?
It's actually been two of my best trades ever because I bought it at 5, sold at 40, bought it at 18. at 70, so they're kind of two of my really good trades.
My house is like the third best trade.
So when it comes to Bitcoin now, I'm kind of hoping it gets below 70 to buy the dip into this, but I don't know if it will necessarily get that.
If we do, I think it will be short lived with liquidity coming back in the system, I treat Bitcoin like a high beta stock.
At the end of the day, it's going to be high beta compared to the market.
If the market rebounds and recovers, I think we'd get back to $100,000 sometime in December.
I know I'm on the record with you, which I might look like a fool in like 10 years.
I think I said something along the lines of I do think Bitcoin's going to a million dollars a coin at some point, probably in the next decade.
I don't know exactly when, maybe next decade or two, you know, I know it's going to get, I think it's going to get there eventually.
Timing is obviously the issue there, but I've seen the headlines Bitcoin replaces gold's market cap or approaches gold's market cap at some point in my lifetime.
So we'll see what happens.
Well, Luke, always great having you here at the New York Stock Exchange.
Thank you so much for joining me and happy holidays.
Thank you.
Thank you.
