The calm after the storm... The Fed is upstaged by Congress... Must be nice to give yourself a raise... 'A total dumpster fire'... Our holiday plans... The 'twin peaks' of inflation...
 Yesterday's Fed-driven panic eased today...
The major U.S. stock indexes fell dramatically yesterday after the Federal Reserve cut rates while saying it expects higher inflation in 2025. Fed members are now projecting only two more small rate cuts next year, compared with the four they projected just three months ago. It also sounded like the Fed could be done with cuts altogether. That's certainly the way market expectations are trending, with inflation numbers picking up again the past few months, not coincidentally right after the Fed began cutting rates with a 50-basis-point drop in mid-September. Still, the market jitters eased today, though they didn't disappear completely... The benchmark S&P 500 Index was down 0.1%, and the Dow Jones Industrial Average was little changed. The Nasdaq Composite Index and the small-cap Russell 2000 Index were down 0.6%. Longer-term bond prices continued to fall while yields moved higher, signaling even greater expectations for high(er) inflation ahead. Bonds have a fixed payment, and their prices move opposite of market interest-rate changes. Remember, the bond market said it first... Three months ago, longer-term bond yields – reflecting higher inflation (and/or growth expectations, depending on who you ask) – began rising. The 10-year Treasury yield neared 4.6% today, a full percentage point higher than it was on September 17. Longer-term bond yields tend to be more market-driven than shorter-term yields, which often track Fed policy. We've been noting high(er) inflation numbers over the past few months. So the outcome of "probably fewer rate cuts" didn't surprise us. But the idea dropped like a hammer in the stock market, which clearly wasn't expecting the Fed to formally project a greater pace of inflation and offer less monetary "juice" in 2025. The question now is, "Was that it?" At the start of this week, we said the market looked extremely greedy. So a drop wasn't shocking. And today, the market tantrum didn't continue. That's good news for bulls. The S&P 500 traded back near its 50-day moving average. The Nasdaq remains above its short-term average and it's longer-term 200-day moving average. However, the Dow Jones Industrial Average and Russell 2000 are in a no man's land somewhere in between their short-term and long-term averages. So this isn't the strongest part of the two-year bull market we've seen. But we've been here before. You may recall August's mini panic related to higher unemployment and the "yen carry trade" freakout, also tied to potential Fed decisions. Volatility spiked then, but gradually came down. So we're not sounding the alarm yet. But it's definitely worth noting the type of volatility that could happen again the longer the current bull market goes on... and if – or when – more "surprises" pop up. Meanwhile, elsewhere in D.C... While the Fed was central in yesterday's market behavior, it has now been upstaged by other nonsense... Yesterday, Congress' proposed 1,500-page government funding bill was made available to read... And it was a doozy. Among other things, the bill suggested a 40% "cost of living" pay raise for members of Congress (they haven't had a raise since 2009, which I don't think many Americans would complain about). It also included $110 billion of new funding for natural disaster relief... health care policy-related legislation... and money for seasonal and migrant workers. So we have a newly elected Donald Trump administration about to arrive in Washington, D.C., promising sweeping changes like cutting government spending... and one of the ideas Congressional leaders proposed before the transition was to give themselves a raise. According to many Republicans, much of this wasn't expected to be included in the "continuing resolution" funding bill for the government, which needs to be passed to avoid a government shutdown at midnight on Friday. Conveniently, that's just before Congress is due to leave Washington for the holiday break. This has happened in prior years – and bills filled with various "pork projects" have passed – accompanied by grumbling from people like us. However, yesterday's proposed bill was almost instantly derided by people close to President-elect Trump, like from the Department of Government Efficiency captains Elon Musk and Vivek Ramaswamy. Here's what Musk posted on his social platform X yesterday afternoon... Last night, the bill was declared dead by House Majority Leader Steve Scalise. Given the reaction, Mike Johnson, the Republican Speaker of the House who agreed to the original framework of the bill, may not be long for the job... or the parameters will change. As CBS News reported today... Trump has also been signaling that his support for Johnson is contingent on how the Louisiana Republican proceeds. The president-elect told Fox News Digital on Thursday that Johnson would "easily remain speaker" if he "acts decisively and tough" and eliminates "all of the traps being set by Democrats" in the spending package. Asked by NBC News if he still has confidence in Johnson, Trump replied, "We'll see." In addition to the slew of add-ons to the spending bill, conservatives are angry with Johnson for carrying out the negotiating process largely outside of the view of rank-and-file members. Rep. Eric Burlison, a Missouri Republican, called it "a total dumpster fire." Trump is now saying he wants to strip items from the bill and, notably, also include a higher debt ceiling in it too, so he doesn't have to deal with it starting next month. While a higher debt ceiling is usually approved by Congress so the Treasury Department can borrow more to pay for prior spending decisions, it points to more "business as usual" when it comes to Uncle Sam continuing to kick most of the contents of the fiscal-responsibility-can down the road. Folks in Congress are now scrambling to come up with a new deal by the end of tomorrow. Just before U.S. markets closed today and we go to press tonight, House Republicans said they reached a new framework. Trump has endorsed it and called for a vote tonight, and Democrats were said to be meeting to mull it over. If Congress does not pass a bill, the unfunded government will shut down at the end of this week in dysfunctional fashion. It wouldn't be the first time. 'Tis the season, I suppose. Speaking of the holidays... Over the next two weeks, our Stansberry Research team will be enjoying some deserved time off, and we're thankful to our leadership for allowing it. Subscribers to our paid publications will still receive their monthly issues and any trade updates as expected, and we'll be sending you a few "classic" and guest Digest essays (though not on or around Christmas and New Year's Day). We'll pick up with our "regular" daily fare in 2025. I think you'll enjoy what we have lined up, starting tomorrow with a classic essay from Dan Ferris. We'll also be sharing guest essays from Stansberry Research founder Porter Stansberry and Marc Chaikin, founder of our corporate affiliate Chaikin Analytics. In the meantime, our team has published plenty of new material this week… The 'twin peaks' of inflation... In this month's Stansberry's Credit Opportunities issue, published yesterday, Mike DiBiase and Bill McGilton share their predictions for the coming year and how the next credit crisis will play out... including when the next recession will begin and how the Fed will respond... and why we're likely to see a repeat of the "twin peaks" in inflation the U.S. economy saw in the 1970s. As they explain... Just like in the mid-1970s, everyone thinks inflation is tamed. And yet, once again, government spending is out of control – and the money supply is on the rise... A recession is very near. We expect the government will... try to "fix" the economy with more monetary stimulus. That will only make things worse. The seeds are in place today for another 1970s-style "twin peaks" in inflation. The chart below shows the "twin peaks" Mike and Bill are referring to. It largely tracks money-supply increases and decreases in the 1970s and '80s... The next chart shows inflation versus the year-over-year increase in the money supply back in the 1970s (with a 30-month lag, in other words, shifted forward 30 months). Back then, it took around 30 months for increases in the money supply to have an effect on inflation. 
The second wave of inflation was worse than the first. It didn't come down until Paul Volcker's austere policies of higher interest rates and a contraction of the money supply finally slayed it for good. Mike and Bill then shared how the path of inflation and money supply today looks eerily like the first half of the chart from the 1970s... Today, we're somewhere around 1976 in the cycle. Inflation appears to be under control. It has fallen from its peak of 9% in June 2022 to 2.7% today. But the Fed is making the same mistake it did back in the 1970s. It's easing monetary policy before inflation is truly licked. Thankfully, Mike and Bill have some ideas about how you can prepare for a similar outcome to the 1970s. Simply put, this is a must-read issue. Stansberry's Credit Opportunities subscribers can find it here. On risky times... On Tuesday, Dan sent out his latest The Ferris Report, titled "The Riskiest Moment of Your Investing Career, Part II." It's a follow-up to his October issue, and Dan discusses how stock market "risk" has risen over the past two months. The Ferris Report subscribers can find it right here. Meanwhile, Stansberry Innovations Report editor John Engel says, "Tech stocks are becoming increasingly overvalued. And it's likely we'll see a pullback in 2025." He explained more in this month's Innovations Report issue, published yesterday. Innovations Report subscribers can find it here. The latest on cryptos... Earlier this week, Crypto Capital editor Eric Wade released his newest buy recommendation for a project that "is bringing blockchains together." He also gave an overview of the crypto world's latest trends... The total market cap for cryptos began the year at $1.79 trillion and blew past all-time highs previously seen in 2021. Now, it's floating around $3.95 trillion, more than doubling since then. Part of that is thanks to bitcoin's (BTC) halving early in the year, as well as the launch of bitcoin exchange-traded funds, which led to a lot of value entering the market. You see, bitcoin is the largest crypto by market cap. So when it moves, the entire market moves with it. The recent pro-crypto U.S. presidential-election results have also pushed up investor interest in the space... and sent bitcoin surging to more than $100,000. As we look forward to the new year, we expect altcoins – every crypto besides bitcoin – to ramp up in value as more and more global institutions adopt crypto technology. Crypto Capital subscribers can read the latest monthly issue here... And if you don't have access already, you can learn more about how to get Eric's latest "altcoin" recommendations and his bullish view on cryptos during this free presentation. New 52-week highs (as of 12/18/24): Invesco DB U.S. Dollar Index Bullish Fund (UUP). In today's mailbag, feedback on the Fed's rate cut decision yesterday and outlook for high(er) inflation again... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. And, once again, happy holidays. "Corey, I'm absolutely sure you aren't surprised that J. Powell went 'AC/DC' so to speak, or that I was not surprised. My advice is the same. Stansberry investors should listen to your cautious comments, but... HO HO HO, Merry Christmas!" – Subscriber Bill B. All the best, Corey McLaughlin
Baltimore, Maryland
December 19, 2024
Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios. Returns represent the total return from the initial recommendation. | Investment | Buy Date | Return | Publication | Analyst | MSFT
Microsoft | 11/11/10 | 1,408.5% | Retirement Millionaire | Doc | MSFT
Microsoft | 02/10/12 | 1,398.5% | Stansberry's Investment Advisory | Porter | ADP
Automatic Data Processing | 10/09/08 | 1,046.2% | Extreme Value | Ferris | BRK.B
Berkshire Hathaway | 04/01/09 | 691.8% | Retirement Millionaire | Doc | WRB
W.R. Berkley | 03/15/12 | 517.6% | Stansberry's Investment Advisory | Porter | TT
Trane Technologies | 04/12/18 | 504.9% | Retirement Millionaire | Doc | AFG
American Financial | 10/11/12 | 479.2% | Stansberry's Investment Advisory | Porter | TTD
The Trade Desk | 10/17/19 | 449.6% | Stansberry Innovations Report | Engel | HSY
Hershey | 12/07/07 | 433.2% | Stansberry's Investment Advisory | Porter | SFM
Sprouts Farmers Market | 04/08/21 | 420.4% | Extreme Value | Ferris | Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals | | 4 | Stansberry's Investment Advisory | Porter | | 3 | Retirement Millionaire | Doc | | 2 | Extreme Value | Ferris | | 1 | Stansberry Innovations Report | Engel |
Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio | Investment | Buy Date | Return | Publication | Analyst | BTC/USD
Bitcoin | 11/27/18 | 2,570.2% | Crypto Capital | Wade | wstETH
Wrapped Staked Ethereum | 12/07/18 | 2,291.8% | Crypto Capital | Wade | ONE/USD
Harmony | 12/16/19 | 1,320.6% | Crypto Capital | Wade | POL/USD
Polygon | 02/25/21 | 758.6% | Crypto Capital | Wade | VET/USD
VeChain | 05/17/19 | 448.9% | Crypto Capital | Wade | Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio.
Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios | Investment | Symbol | Duration | Gain | Publication | Analyst | | Nvidia^* | NVDA | 5.96 years | 1,466% | Venture Tech. | Lashmet | | Microsoft^ | MSFT | 12.74 years | 1,185% | Retirement Millionaire | Doc | | Inovio Pharma.^ | INO | 1.01 years | 1,139% | Venture Tech. | Lashmet | | Seabridge Gold^ | SA | 4.20 years | 995% | Sjug Conf. | Sjuggerud | | Nvidia^* | NVDA | 4.12 years | 777% | Venture Tech. | Lashmet | | Intellia Therapeutics | NTLA | 1.95 years | 775% | Amer. Moonshots | Root | | Rite Aid 8.5% bond | | 4.97 years | 773% | True Income | Williams | | PNC Warrants | PNC-WS | 6.16 years | 706% | True Wealth Systems | Sjuggerud | | Maxar Technologies^ | MAXR | 1.90 years | 691% | Venture Tech. | Lashmet | | Silvergate Capital | SI | 1.95 years | 681% | Amer. Moonshots | Root | ^ These gains occurred with a partial position in the respective stocks.
* The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%.
Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio | Investment | Symbol | Duration | Gain | Publication | Analyst | | Band Protocol | BAND/USD | 0.31 years | 1,169% | Crypto Capital | Wade | | Terra | LUNA/USD | 0.41 years | 1,166% | Crypto Capital | Wade | | Polymesh | POLYX/USD | 3.84 years | 1,157% | Crypto Capital | Wade | | Frontier | FRONT/USD | 0.09 years | 979% | Crypto Capital | Wade | | Binance Coin | BNB/USD | 1.78 years | 963% | Crypto Capital | Wade | | 
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