“All I Want For Christmas Is...!”

Hi There! For those who know me well, you’ll know I have this deep, unshakable connection with numbers. Especially 111. It’s a message from the universe that always seems to find me at the most opportune time.

These past few weeks have been downright magical. Everywhere I looked, on my phone, receipts, random clocks, miles, there it was: 111. Even this moment feels cosmic because, guess what? This is my 111th issue! It’s like my grannies, my angels, were whispering to me all week, letting me know I’m on track.

Now, let me share why this number hits home. In numerology, 111 is like a green light for the soul. It’s a sign to be present, to stay open, and to engage with the moments ahead. It’s about fresh beginnings, big opportunities, and the kind of change that feels like the start of something incredible. Also, it is a reminder for me to focus on the good, trust my gut, align with that inner voice, and believe that what I truly want is already making its way to me.

Numbers do not lie!

Alright, let’s dig in!

Last Week’s Market Overview (December 08 - December 14, 2024)

Markets stumbled this week as U.S. indexes pulled back from record highs despite a well-received inflation report. The Nasdaq briefly crossed the 20,000 milestone midweek, fueled by technology stocks, while the S&P 500 dipped less than 1%. Emerging markets found support on optimism around Chinese stimulus measures, while European markets slipped following a rate cut from the European Central Bank (ECB) and rising political uncertainty in France and Germany. U.S. Treasuries sold off, driving yields sharply higher, and commodities rallied broadly, led by oil on renewed sanction risks against Russia and Iran.

U.S. Markets Recap

U.S. stocks lost ground this week despite a positive inflation report solidifying expectations of a Fed rate cut next week. The S&P 500 declined marginally (-0.64%), while the Nasdaq edged higher (+0.34%) thanks to tech names like Broadcom (AVGO) and Alphabet (GOOGL), which jumped on quantum computing progress and easing antitrust fears. However, weak market breadth with declining stocks outpacing gainers nine days in a row, weighed on overall sentiment.

Earnings played a mixed role. Broadcom surged on upbeat guidance, but Adobe (ADBE) and Oracle (ORCL) disappointed with weaker outlooks. Tesla (TSLA) bolstered the consumer discretionary sector with a 10% gain. Growth stocks, particularly tech and consumer discretionary, outperformed value-oriented sectors like energy, financials, and materials. Small caps struggled, dragged down by underperformance in biotech names, signaling rising investor caution as year-end approaches.

Fixed Income: The bond market faced another challenging week. Despite the likelihood of a Fed rate cut next week, Treasury yields climbed sharply, with the 10-year yield rising more than 25 basis points and the two-year yield adding over 15 basis points. Inflation expectations ticked up slightly, contributing to higher yields and raising questions about whether the Fed has truly tamed inflation. Corporate credit spreads remained tight, reflecting continued investor confidence.

The move in yields mirrors bond price action seen after the Fed’s September rate cut and reflects concerns over structural challenges like persistent deficits, high Treasury issuance, and a flat yield curve. For investors, shorter-duration Treasuries and corporate bonds remain attractive options for locking in yields without significant interest rate risk.

Commodities: Commodities rose broadly this week, with the Bloomberg Commodity Index gaining over 1%. Crude oil prices climbed 6%, driven by fears of new U.S. sanctions on Russian and Iranian oil exports. This offset worries about a potential supply surplus next year, highlighted by the International Energy Agency’s (IEA) projection of a 1.4 million barrel-per-day surplus in 2025.

Gold gained 0.8% on safe-haven buying following renewed Russian airstrikes in Ukraine, while expectations for a Fed rate cut offered additional support. Silver and copper also delivered modest gains, reflecting improved industrial sentiment.

Currencies: The U.S. dollar strengthened for a sixth consecutive day, rising 0.9% as it approached key resistance near the 107 level. The euro struggled following the ECB’s dovish tone and softer economic outlook. Emerging market currencies also faced pressure, with the dollar’s strength adding headwinds despite China’s stimulus optimism.

U.S. Economic Recap (December 08 - December 14, 2024)

• Inflation Holds Steady. November consumer inflation data aligned with expectations. Core inflation rose 0.3% month-over-month for the fourth straight month, while annual core inflation held steady at 3.3%. Shelter costs remained the primary driver. Real wages increased 1.3% year-over-year, providing consumers with continued spending power heading into 2025.

• Business Spending Outlook Brightens The National Federation of Independent Business (NFIB) reported a surge in capital spending plans, hitting the highest levels since January 2022. Optimism among businesses also climbed to pre-pandemic levels, fueled by expectations of infrastructure demand and stronger economic momentum.

Global Markets Recap (December 08 - December 14, 2024)

• Europe: European stocks ended the week lower as political uncertainty overshadowed a dovish ECB rate cut. French markets rebounded late in the week after Prime Minister Michel Barnier’s government collapsed, easing fears of tax hikes. German stocks hit record highs midweek but retreated as economic growth concerns lingered.

• Asia: Asian markets saw mixed results. Japan logged gains following Bank of Japan (BoJ) Governor Ueda’s comments suggesting rate hikes are approaching. Taiwan outperformed on strong tech sector performance, mirroring Wall Street’s rally. However, South Korea faced political turmoil as President Yoon Suk Yeol’s impeachment loomed, dragging local markets lower. China managed slight gains despite a muted economic planning conference, with investors hopeful for fiscal support.

Crypto Recap (December 08 - December 14, 2024)

• Bitcoin Hits $108K (at time of writing): Bitcoin surged to a new all-time high of $108,268.45 despite last week’s turbulence that saw a flash crash wipe out $1 billion in leveraged positions. Investors accumulated Bitcoin aggressively, highlighting confidence in its long-term fundamentals.

• BlackRock Endorses Bitcoin Allocation: BlackRock, the world’s largest asset manager, recommended allocating up to 2% of portfolios to Bitcoin. The firm’s spot Bitcoin ETF has already overtaken its long-established gold ETF in net assets.

• Frax Partners with IQ to Develop AI Blockchain Stack: Aimed at integrating artificial intelligence with blockchain to enable fully autonomous AI agents.

• Among Last Week’s Top Crypto Gainers: ONDO, AAVE, VIRTUAL.

Here are other key highlights from last week:

• Google’s Quantum Computing chip raised questions about Bitcoin’s security.

• MARA Holdings bought $1.1B more Bitcoin.

• Pudgy Penguins surpassed BAYC to become second-largest NFT Collection.

• Adidas revealed ALTS NFT Collection nearly 3 years after initial mint.

• Polygon DAO weighed $1.3B stablecoin deployment to generate $70M annual yield.

This week is packed with high-impact economic events!

So far,

• NY Fed Manufacturing Index: Plunged to +0.2 (Est. +6.4, Prev. +31.2).

• Services PMI: Rose to 58.5 (Est. 55.7, Prev. 56.1).

• Manufacturing PMI: Fell to 48.3 (Est. 49.4, Prev. 49.7).

• Retail Sales: Rose 0.7%

Other Key U.S. Economic Releases to Watch This Week:

1. Building Permits & Housing Starts (Wednesday)

2. Fed Interest Rate Decision (Wednesday)

3. Initial Jobless Claims (Thursday)

4. Q3 GDP (Thursday)

5. Existing Home Sales (Thursday)

6. Philly Fed Manufacturing Index (Thursday)

7. PCE Price Index (Friday)

8. UoM Consumer Sentiment (Friday)

Fed speakers this week:

• Fed FOMC Dot Plot Release (Wednesday)

• Fed Chair Jerome Powell Speaks (Wednesday)

Earnings:

Key earnings releases are outlined in red.

Global Economic Events This Week:

• Monday: Eurozone Flash Services PMI, UK Services PMI, BoC Gov Macklem Speaks

• Tuesday: German ifo Business Climate, Canada CPI

• Wednesday: UK CPI, BoJ Interest Rate Decision

• Thursday: BoE Interest Rate Decision, China Loan Prime Rates (1-year and 5-year)

• Friday: UK Retail Sales, Canada Retail Sales

Trading Tip:

“Santa Clause Rally typically begins on the last trading day before Christmas!”

Week 12/08/24 - 12/14/24 Recap

Special Tools and Strategies

You Need to Know This: CEX vs. DEX

Imagine you just read the crypto headlines about a memecoin, called Moo Deng, that turned a small $800 investment into millions for someone. Naturally, you’re thinking, “Where can I find these hidden gems before they land on big platforms like Coinbase?” The answer: start by understanding the key differences between Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs).

What is a Crypto Exchange?

A cryptocurrency exchange is like a digital marketplace where you buy, sell, and trade cryptocurrencies. Think of it as the equivalent of a stock exchange, but for crypto. Exchanges are divided into two categories: Centralized Exchanges (CEX) and Decentralized Exchanges (DEX). Each has its unique features, benefits, and risks.

Centralized Exchanges (CEXs): The Basics

A centralized exchange is a platform operated by a third-party company (like Coinbase or Binance) that oversees and facilitates crypto trading. It acts as a middleman, similar to a traditional bank or brokerage.

How It Works

• The exchange holds custody of your funds and executes trades on your behalf.

• You sign up, complete verification (KYC/AML), and deposit fiat currency or crypto.

• Examples: Binance, Coinbase, Kraken, Gemini, and Robinhood.

Why Investors Like CEXs

• User-Friendly: CEXs offer simple interfaces, making them ideal for beginners.

• Fiat Support: You can easily buy crypto using fiat currencies like USD, CAD, or GBP.

• High Liquidity: Trading volumes are higher, ensuring faster and smoother transactions.

• Customer Support: CEXs typically offer customer service to help resolve issues.

What to Watch Out For

• Custodianship: The exchange controls your funds (not your keys, not your crypto).

• Security Risks: CEXs are vulnerable to hacking, as they store large amounts of crypto.

• Regulation: CEXs are regulated but are subject to government rules, which could restrict your access in some regions.

• Examples of Issues: The collapse of FTX in 2022 is a reminder that even big, centralized platforms carry risks.

Decentralized Exchanges (DEXs): The Basics

A decentralized exchange allows users to trade crypto directly with each other (peer-to-peer) without intermediaries. Transactions are automated and secured through smart contracts on the blockchain.

How It Works

• You connect your crypto wallet to the exchange.

• Trades happen directly between users using blockchain technology.

• Examples: Uniswap, QuickSwap, PancakeSwap, and VVS Finance.

Why Investors Like DEXs

• True Ownership: You hold your private keys, so you always control your crypto.

• Access to New Coins: DEXs are often the first place where new and smaller cryptocurrencies are listed.

• No KYC: You don’t need to provide personal information, preserving your privacy.

• Global Access: No restrictions based on region or nationality.

What to Watch Out For

• User Experience: DEXs are less beginner-friendly and may require more technical knowledge.

• Lower Liquidity: Trading volumes are often lower, especially for less popular tokens.

• No Customer Support: If you make a mistake, there’s no one to call for help.

• Scams: Without regulation, new coins on DEXs can sometimes be part of pump-and-dump schemes.

CEX vs. DEX: Side-by-Side Comparison

Which Exchange is Right for You?

Your choice depends on your investor type and goals:

• If you’re a beginner: Start with a Centralized Exchange like Coinbase or Binance for ease of use and customer support.

• If you want control and privacy: A Decentralized Exchange like Uniswap allows you to hold your funds securely.

• If you’re hunting for new coins: DEXs are where new tokens often appear first. Use tools like DEX screeners or platforms like CoinMarketCap (discussed in Issue #53) to track trending tokens.

Key Stats to Know

• As of 2023, Centralized Exchanges accounted for 90% of total crypto trading volume.

• DEX trading volume reached over $850 billion in 2022, reflecting growing interest.

• Uniswap leads DEX trading with 50% market share.

Choose Wisely

Centralized and Decentralized Exchanges both play a vital role in the crypto market. If you’re just starting out, CEXs are an easier entry point. As you gain confidence, exploring DEXs can help you access emerging opportunities and take full control of your crypto.

Remember, the golden rule of crypto investing is: “Not your keys, not your crypto.” If you choose a CEX, a DEX, or a mix of both, always prioritize security, understand the risks, and stay informed.

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.