Let's get to the big story breakdown.
Well, Wall Street is looking at a higher open in midweek trade, and this does come on the heels of the latest ADP report.
Now markets did get back on track yesterday, and Apple closed at another record high.
Meanwhile, in commodities gold pulled back while silver continues its record run as well as copper.
The 10 year yield has edged lower over the last week, and the OECD released its growth forecast projecting 2% US GDP growth this year.
1.7% growth next year.
TheI trade and rate cuts are expected to continue to drive America's growth.
Joining me to weigh in this morning is Jonathan Corpina, senior managing partner for Meridian Equity Partners.
Good morning.
Thank you so much for joining me.
Well, here we are as we kick off the month of December, and we are anticipating the Fed rate cut next week.
Right now we are looking at expectations for a Fed rate cut of 25 basis points, hovering right around the 88.8%.
Levels, but what do you make of this week's data as well as some of those earnings we're getting?
Yeah, still a lot of volatility in our economic data and a lot of volatility in our markets.
Yes, you know, we might be up today.
I think we're going to start to see a little bit of pressure on our markets.
We're in this weird period where earnings season is over.
We're going to get our normal economic calendar, some good news, some bad news.
I don't think there's anything on our economic calendar that's going to sway the decision of the Fed, and now we're in this period of we're going to wait.
Until next week to see what the Fed says on Wednesday.
All indications, as you said, is that the Fed is going to cut rates 25 basis points.
If you go back over the last few weeks, we've had many ups and downs on that, right?
We've had a lot of volatility in the market due to the fact that there was some conversation or some chatter.
Maybe they weren't going to cut rates and pause, but all the indications now are that they are going to cut rates.
It's priced into our markets now.
You know, we kind of have to get past that.
Unfortunately.
That is the end of the year, the holiday season, things tend to get quiet during that time of period.
A couple, you know, you've got money that's been implemented into the market that's probably going to freeze to as we get towards the end of the year.
Not going to hear a lot of M&A deals or syndicate deals as we get to the end of the month and end of the quarter.
So we're going to get into this weird kind of period of we're waiting for the Fed.
We know what they're going to do.
We kind of feel like we know what the market reaction is going to be.
And then we're going to get into, you know, a couple of weeks of holiday season, so I think people are starting to look forward to 2026 at this point.
Yeah, and Jonathan, I think weird is a good word to describe the period that we're in because the countdown is on until year end.
And when we take a step back and look at the year to date gains for the major stock averages, they are healthy.
So I do want to dive into some of these sectors.
When we take a step back, we see IT as well as communications services outperforming the index itself in terms of percentage gains, but we've seen healthcare come into play when it comes to the 3 month gains.
So what's Going on there, yeah, I mean, clearly in that sector there has been a large focus on that in this new administration, you know, focusing on weight loss drugs and pricing that's associated with that and making health care more affordable and helping access to more.
So I think there's been such a spotlight on that area there that investors are feeling that there is that opportunity for growth and expansion, which I think we are going to continue to see.
And of course you said we're looking ahead.
To 2026 and indeed it's the time of year when outlooks for the new year come out.
So what is your outlook and what are the key catalysts that you think will move the market?
Yeah, I think, you know, Rey, we talk a lot and if I go back, you probably asked me this question a year ago and I think I might kind of say the same things.
We still have a lot of headwinds that are in front of us, right?
We're going to continue to talk about trade wars.
We're going to talk about our geopolitical risks.
We were having this conversation exactly a year ago about interest rates, and we're And we're going to continue to have that.
So the headwinds in our markets are still there.
I think overall in a bigger, longer term aspect and look at the markets, our markets are strong enough to shake off a lot of this stuff right going into this year, it was a new administration coming in and these other headwinds that I was speaking about.
You could have definitely felt a little there would have been a lot of pressure on our markets, but clearly there wasn't, and our market seems to always kind of get through these, these obstacles that's in its way.
So I think those headwinds are in front of us, but our economy is getting better.
I think people are getting much more comfortable with interest rates where they're coming down to.
I think our home pricing is becoming a little bit more, you know, not affordable, but people are feeling more comfortable getting back into that market there, and I think we're going to see our housing prices continue to continue to rise.
Spending, we're seeing from the retail side that people have a little bit more discretionary spending and they're spending in the right spot.
We're seeing it travel has continued to uptick.
So I think all these areas here are going to continue to help our economy.
You know, my outlook for next year is we're going to continue to see what we have been seeing.
We're going to continue to see growth in our economy.
We're going to continue to see, you know, acceptance, the, you know, investors feeling very comfortable with our economy and comfortable with our markets and comfortable with their jobs, and spending is going to continue.
So I see favorable things ahead.
And finally, Jonathan.
Before I let you go, of course there's been this question about valuation, whether we're talking about AI or other sectors of the market, but we're seeing the opportunities because when we take a step back and look at some of the asset classes, we're looking at precious metals, seeing double digit percentage gains, and here we are about to end the year and crypto is not doing as well as it was earlier this year.
So where are you seeing opportunities?
Yeah, I think in some of those asset classes like Uh, gold and silver silver where people feel like they're a little bit more safer in their investments as our as our equity asset class has continued to go higher and higher and that feeling of, OK, when is it going to turn, when are we going to have this sell off.
We're seeing a little bit more safe investments that are out there and that's why we're seeing it in gold and silver crypto clearly has come down 25% plus off its highs, you know, maybe, maybe.
Levels were a little euphoric and maybe where we're trading now seems to try to find its range there and as far as our markets, the equity markets are concerned, you know, we talk about the levels that we're trading at and near the all-time highs that we've been at and there's always that normal conversation of what is going to be that catalyst, what's going to be that sell off, you know, at this point right now, I think the factors that I mentioned before could certainly add into.
That if the Fed decides not to cut rates, if we have some increased in geopolitical risks or increased in our trade wars, but I think overall with with the AI headlines that we continue to focus on and how that rises all many of the other sectors around it, I think we're going to continue to see growth in the tech sector.
OK, Jonathan, thank you so much for joining me and happy holidays.
You too.
Thank you.
