Fast Money Blog- 12/20/24
The big news on Wall Street this past week was the Fed meeting on Wednesday, Dec. 18th.
As expected, the Federal Reserve lowered its key interest rate by a quarter percentage point, the third consecutive reduction.
This comes off the heels of last week’s November 2024 CPI report, which showed that inflation remains at 2.7%, above the Fed target of 2%. Shelter costs are remaining particularly stubborn, and rose by 0.3% in November. It’s important to note that the costs of shelter accounted for nearly forty percent of the monthly increase in the all-items index, which also rose by 0.3%.
What does economic data mean for my trading account?
Simply stated, stock markets generally thrive in lower interest rate environments. This means pension funds buy large amounts of stock in a thriving economy. These large big-block investments help drive stocks higher. I expect members of the Wealthy Investor program to do very well if they focus on companies that are traded in the S&P 500 and the Dow Jones Industrial Average.
In other news, two weeks ago the S&P 500 Index was rebalanced. As of December 23rd, Qorvo Inc. (QRVO) and Amentum Holdings Inc. (AMTM) will be dropped and Apollo Global Management Inc. (APO) and Workday, Inc. (WDAY) will replace them.
Retail Stocks on the Move
Over the last 30 days there has been a strong upward trend favoring retail stocks, as show below.
Costco Wholesale Corporation (COST)
30 days ago COST shares were trading around $916 per share.
Today COST shares closed at $954.07 per share.
Walmart, Inc. (WMT)
30 days ago WMT shares were trading around $85 per share.
Today WMT shares closed at $92.25 per share.
Amazon, Inc. (AMZN)
30 days ago AMZN shares were trading around $199 per share.
Today AMZN shares closed at $224.92 per share.
By contrast, semi-conductor stocks have fallen slightly out of favor over the past 30 days, as shown below.
NVIDIA Corporation (NVDA)
30 days ago NVDA shares were trading around $142 per share and were as high as $145.79.
Today NVDA shares closed at $134.70 per share.
Texas Instruments Incorporated (TXN)
30 days ago TXN shares were trading around $196 per share.
Today TXN shares closed at $186.87 per share.
Applied Materials, Inc. (AMAT)
30 days ago AMAT shares were trading around $167 per share and were as high as $183.26
Today AMAT shares closed at $163.59 per share.
Reminder: Wall Street does not typically move semi-conductor stocks higher in the 4th quarter, because it’s rare that this sector will see a rise in revenue in the last 3 months of the year.
On the other hand, I expect retail stocks to continue to rise into January because the unemployment rate is declining alongside inflation.
As a Wealthy Investor student it is supremely important that you are well educated with seasonal trading trends.
I expect 2025 to be a dynamic year for the Dow Jones Industrial Average and the S&P 500.
Stay Open! Stay Positive!
Tyrone Jackson
The Wealthy Investor
Once again Costco Wholesale Corporation (COST) posted outstanding Q1 2025 earnings with top line revenue of $62.15 billion, up 7.5% year-over-year.
Here are some of the highlights:
The company reported strong sales of meat and produce, as well as gold and jewelry, sporting goods and health and beauty products, which were all up by double digits year-over-year.
In addition, Costco’s private label brand, Kirkland Signature, is growing faster than the total business.
Costco's e-commerce sales increased 13%, while same-store sales were up 5.2% in the U.S.
The company also ended the quarter with 77.4 million paid household members, an increase of around 8% year-over-year. This means that almost 25% of the U.S. population has a Costco membership.
Shares of Costco are up nearly 50% in the past year.
Oracle Corporation (ORCL) reported Q2 2025 earnings with top-line revenue of $14.06 billion, an increase of 9% year-over-year.
Cloud services and license support revenues for the quarter were up 12% year-over-year, to $10.8 billion.
Record level AI demand drove Oracle Cloud Infrastructure revenue to $2.4 billion, up 52% in Q2.
For those of you who don’t know, Oracle Cloud Infrastructure trains several of the world's most important generative AI models.
The company also announced that it just signed an agreement with Meta, allowing the social media company to use its infrastructure.
Year to date the stock has gone from $103 to $176.
Oracle is quietly ruling the world because of their focus on cloud services and infrastructure. I will explain this further in 2025.
Select Dow and S&P stocks have been on fire and even The Walt Disney Company (DIS) which has been a laggard over the last 3 years is slowly rising to the top of the media heap.
Last month Disney released its Q4 2024 and full fiscal year earnings, along with announcing that Disney+ would add free ESPN streaming content starting in December.
Revenues increased 6% for Q4 to $22.6 billion from $21.2 billion in the prior-year quarter, and 3% for the year to $91.4 billion from $88.9 billion in the prior year.
Revenue for Disney’s Entertainment segment – which includes the traditional TV networks, direct-to-consumer streaming and films – was impressive, with a 14% increase year over year to $10.83 billion.
The summer blockbuster films Inside Out 2 and Deadpool & Wolverine added $316 million of profit for the entertainment segment during the quarter. Overall, the entertainment segment reported nearly $1.1 billion in profit.
Disney’s combined streaming business (Disney+, Hulu and ESPN+) reported Q4 operating income of $321 million compared with a loss of $387 million year-over-year.
Plus Disney’s streaming entertainment ad revenue for Q4 was up 14% year-over-year.
In other unusual news, the company shared encouraging growth expectations for the next 3 years.
The retail sector including Costco, Walmart (WMT) and BJ’s Wholesale Club Holdings, Inc. (BJ) is quickly emerging as one of the hottest sectors on Wall Street. In 2025 the educated investor will reap the benefits of owning retails stocks.
I want to point out that in this last quarter, Walmart generated $169 billion in revenue, while Disney generated $22.6 billion and Oracle generated $14.06 billion.
Stay open and stay positive!
2025 looks like it will be an exceptionally good year for Wealthy Investor students.
Tyrone Jackson
The Wealthy Investor