A down day... The Fed takes center stage again tomorrow... What's likely to happen... Room for questions... Wall Street has rarely been this bullish... An investing road map for 2025...
 The market looked jittery today...
The major U.S. indexes all moved lower on today's open and closed down across the board. The small-cap Russell 2000 Index was off more than 1%, and the Dow Jones Industrial Average was off 0.6%, finishing down for the ninth straight trading day. The CBOE Volatility Index ("VIX") – which measures implied volatility via options activity on the S&P 500 – ticked higher, but only from really low levels to 15. This "fear gauge" remains slightly below its long-term average. Now, falling stocks and rising volatility aren't necessarily welcome. But after what I (Corey McLaughlin) just wrote to you yesterday about market "froth" – and market strength being weaker than it might appear on the surface – a move like this does feel appropriate. The benchmark S&P 500 Index, down 0.5% today, is still up almost 27% for the year. Let's not be greedy... And you could argue there was a good reason for a twinge of volatility today... Notably, it was another Fed Day Eve... We've seen this sort of thing before... Tomorrow the Federal Reserve wraps up its latest two-day policy meeting. It's due to make another interest-rate decision, and Chair Jerome Powell will hold a press conference to try to explain the central bankers' thinking tomorrow afternoon. Ahead of this one, more questions have emerged... and they're not trained on Powell's relationship with President-elect Donald Trump, which was the headline coming out of the previous Fed meeting shortly after the U.S. election. Tomorrow, Powell will surely field questions about the impact of potential Trump policies. But the primary focus should be back on the economy in the here and now... and the path of inflation... That's because as we've been reporting, inflation data over the past two months has picked up and is running at an annualized rate closer to 4% than the Fed's supposed 2% goal. In November, the producer price index rose 0.4% from October and the consumer price index was 0.3% higher month over month. Some very simple math tells you that's well above a 2% annual rate (12 months times 0.4% is 4.8%, and 0.3% annualized is 3.6%). Recall that before the pandemic, a "normal" monthly inflation rate was 0.1% to 0.2%. Those are the numbers for just one month. Other measures of inflation have also remained higher for longer, like the Fed's supposed preferred measure: the core personal consumption expenditures index, or core PCE. It measured 0.3% month-over-month growth in September and October. Other signs also point to the economy heating up. Just today, for example, Uncle Sam reported that retail sales for November grew by 0.7%, exceeding Wall Street expectations. The rise was led by a 2.4% month-over-month gain in auto sales, not something that happens in a weak economy. Yet the Fed has remained steadfast in its plans to keep lowering interest rates. It wants a "neutral" bank-lending rate – meaning one that stokes neither inflation nor unemployment. Four straight months of rising unemployment had the Fed's attention over the summer, but that trend has slowed for now. Could Powell hit the market with a shake-up of the status quo tomorrow? Possibly... The widespread market expectation is that the central bank will lower its suggested federal-funds rate range by another 25 basis points. Fed-funds futures traders have put 95% odds on it. I expect this, too, but the bigger questions are about what will happen in 2025. A few Fed officials in recent weeks have acknowledged that the recent higher inflation numbers could mean the Fed will provide less help for the economy (meaning fewer rate cuts) than investors currently expect. Perhaps after tomorrow's expected cut, the Fed will just keep rates steady for the time being. Yet other analysts and investors are on the complete opposite side of the spectrum and are gravely concerned about what would happen to the economy if the bank doesn't keep cutting rates. It will be interesting to hear what Powell – the big guy with the biggest microphone and audience – says tomorrow... and whether he gives enough clues to make enough investors or traders change their expectations for the year ahead, too. We'll have a report in tomorrow evening's edition. Lately, Wall Street has rarely been more bullish... Picking up on our theme from yesterday about a flip in market sentiment since the start of this bull market run in October 2022... Bank of America released its latest Fund Manager Survey ("FMS") today. It shows that professional fund managers this month have been reducing cash holdings to a record low and throwing money into U.S. stocks. These managers are behaving nearly opposite of how they were during the bear market lows in the fall of 2022, when they were raising cash... 
Market watchers know Bank of America charts like these well. They illustrate Wall Street fund-manager positioning, or how managers are allocating money across particular asset classes (U.S. stocks, cash, commodities, emerging markets, etc.). This month, allocation to U.S. equities rose to a record high of 36% overweight ("OW"), according to the FMS. And cash as a percentage of total assets under management has so far dropped to 3.9%. The reason appears to be the sentiment we described in yesterday's edition: "Everything is possible" (except for anything bad). As Yahoo Finance reported today... Bank of America investment strategist Michael Hartnett noted that excitement about Donald Trump's second term, optimism surrounding growth in the US, and the Federal Reserve cutting interest rates drove "super-bullish sentiment" in the survey. The widespread bullishness comes as investors are increasingly confident the global economy won't enter recession in 2025. Just 6% of respondents to the survey said they believe the global economy will experience a "hard landing" – where higher rates spark a downturn in economic growth – over the next 12 months. This marked the lowest percentage of respondents calling for a hard landing in six months. You might say, hey, that sounds great, let's follow the "smart money." But actually, these fund managers' overwhelmingly bullish behavior has historically been a good "sell signal" for the month to follow. When everyone is already buying, there's only so much cash to put to work and only so many stocks the bulls can buy. This growth pace can't continue indefinitely. (At least not without using margin, anyway... which, as we reported yesterday, has also been on the rise.) In any case, each of the 12 times since 2011 that fund managers have reported holding just 3.9% in cash, the MSCI All-Country World Index has handed investors losses of an average of 2.4% the next month. This level of bullishness in the FMS survey also appeared during a couple significant market tops in the past few decades. The first was in early 2002, before the last leg down of the dot-com bust. Another was in February 2011, ahead of a major stock drop that summer tied to contagion fears about a European debt crisis... and the downgrade of U.S. sovereign debt. Again, like we said yesterday, one data point is not reason alone to say a huge sell-off is imminent. But this is another piece of evidence of a sentiment shift... It tells you that the market environment is "greedy" today. Be careful navigating it. Speaking of that... This morning, our friend and true Wall Street legend, Marc Chaikin, the founder of our corporate affiliate Chaikin Analytics, went live with his "road map for 2025" presentation that we mentioned yesterday. Among other things, Marc reviewed his predictions for 2024 and how his proprietary Power Gauge system flagged 44 of the 50 top-performing stocks of 2024 in advance of their massive gains. And he shared a must-see market prediction for 2025... It's driven by a rare signal (which has been 93% accurate) that flashed recently while most Americans have been distracted by the election, geopolitical turmoil, and the market surging to record highs. He's calling this a postelection surprise that is headed straight for U.S. stocks. As Marc said today near the start of his presentation... Above any federal policy, media crash warning, or Wall Street forecast, this is shaping my investment road map for 2025. And as I'll show you in a moment, if you wait another month or two to position yourself... If you wait even until Inauguration Day... You may be too late to take advantage of it. That's why I'm about to give away a massive amount of information for free, all at once – including two recommendations you can act on now. Specifically, Marc says this strategy could mean the difference between seeing multiple potential 100%-plus gains in your portfolio in 2025... and 30% to 50% losses, which he predicts many average investors are going to suffer in the year ahead. Good news: You can check out a replay of Marc's event here. | | | | In this week's episode of the Stansberry Investor Hour, Dan Ferris and I were thrilled to be joined by investing legend Louis Navellier, who shared insight about his decades of investment research and his secret for finding the market's next big winners... 
Click here to watch the interview now... To hear the full audio version of this week's Stansberry Investor Hour, visit InvestorHour.com or find the show wherever you listen to your podcasts. | | | | | New 52-week highs (as of 12/16/24): Amazon (AMZN), Alpha Architect 1-3 Month Box Fund (BOXX), Ciena (CIEN), Alphabet (GOOGL), Honeywell International (HON), London Stock Exchange Group (LNSTY), PayPal (PYPL), and ProShares Ultra QQQ (QLD). In today's mailbag, feedback on yesterday's edition – where we referenced some similarities between market performance the past two years and that of 1997 and 1998... plus some thoughts on the Fed in advance of tomorrow's policy-meeting announcements... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "I remember the dot-com buildup (bull market) when valuations of certain stocks in the dot-com realm went too high and the blowout that followed (bear market) affected the entire stock market. "I am fearful that the AI buildup is eerily similar and the entire market will suffer when everyone realizes that not enough money can be made from AI in the near term to justify the buildup (bull market) in AI stocks and the market in general." – Subscriber Joe G. "Corey... you probably will not be surprised that I think J. Powell should pause this month at the upcoming meeting. BUT none the less I don't think he is that smart. I think he will cut rates again. And I am invested to take advantage of such a really bad move..." – Subscriber Bill B. Corey McLaughlin comment: Thanks for the note, Bill. I'd too be shocked if the Fed doesn't lower rates tomorrow and also agree it might be a bad move. However, I also think Powell is smart as an individual. The trouble is that the Fed, almost by definition through how it looks at backward-looking data, is always late in making the "right" policy moves... Folks at the Fed are always correcting themselves and reacting to what the economy has been doing, rather than being proactive about what could happen in the future. They don't lack smarts (or fancy college degrees), but conviction. All the best, Corey McLaughlin with Nick Koziol
Baltimore, Maryland
December 17, 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 | 02/10/12 | 1,444.7% | Stansberry's Investment Advisory | Porter | MSFT
Microsoft | 11/11/10 | 1,435.1% | Retirement Millionaire | Doc | ADP
Automatic Data Processing | 10/09/08 | 1,073.4% | Extreme Value | Ferris | BRK.B
Berkshire Hathaway | 04/01/09 | 707.1% | Retirement Millionaire | Doc | TT
Trane Technologies | 04/12/18 | 535.4% | Retirement Millionaire | Doc | WRB
W.R. Berkley | 03/15/12 | 534.9% | Stansberry's Investment Advisory | Porter | AFG
American Financial | 10/11/12 | 492.7% | Stansberry's Investment Advisory | Porter | TTD
The Trade Desk | 10/17/19 | 461.3% | Stansberry Innovations Report | Engel | SFM
Sprouts Farmers Market | 04/08/21 | 450.1% | Extreme Value | Ferris | HSY
Hershey | 12/07/07 | 447.4% | Stansberry's Investment Advisory | Porter | 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 | 2,722.4% | Crypto Capital | Wade | wstETH
Wrapped Staked Ethereum | 12/07/18 | 2,291.8% | Crypto Capital | Wade | ONE/USD
Harmony | 12/16/19 | 1,382.5% | Crypto Capital | Wade | POL/USD
Polygon | 02/25/21 | 779.6% | Crypto Capital | Wade | VET/USD
VeChain | 05/17/19 | 494.6% | 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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