The Market Outlook for the Week Ahead, or Welcome to the Rodeo

With stock market volatility hitting a seven-month high last week, you might have been riding the brahma bull at the Reno rodeo.

It was a technical analyst’s dream come true. We saw the perfect double bottom at $6,500 in the S&P 500 (SPX). This was further confirmed by a perfect double bottom in Goldman Sachs (GS) at $755, one of the lead stocks in the market. Once these levels were tested on a big volume, it was straight up from there.

Whether the bull market has resumed once again depends on how the market deals with upcoming challenges. These include the Fed decision on interest rates due December 10, now at an 83% probability, and the Supreme Court decision on tariffs, which may extend into 2026. Note to self: 83% probability is not a 100% probability.

If the Fed delivers on rates, we may get a slow grind up in stocks going into 2026. If it doesn’t, we may give up all of the 2025 gains. The market is now heavily positioned for a rate cut. If it does a no-show, look out below.

When I know, you’ll know.

What was deeply satisfying was the massive rotation into interest rate-sensitive stocks, which I have been expecting for months. Goldman Sachs (GS) soared by $75 (10%), as did the entire banking sector. Even the remotest real estate plays caught fire, including D.R. Horton (DHI) (+22%) and Sherwin-Williams (SHW) (+8.5%).

That other great interest rate play, gold (GLD), was also brought back to life, while silver (SLV) hit a new all-time high. Platinum (PPLT) absolutely exploded. This is because lower interest rates mean less yield competition from other financial assets. The increased volatility we saw in November eroded confidence in stocks and placed a flight to safety assets at a premium.

The other notable event last week was the lack of participation by technology stocks. Lead stock Nvidia (NVDA) was actually down 1% on what was the best market week in seven months. The rest eked out meager gains at best.

Only Alphabet went ballistic, a newfound favorite of Berkshire Hathaway (BRK/B), which disclosed a major investment in the company. It is interesting to note that (BRK/B)’s first post-Warren Buffett move is to buy a technology stock, which Buffet never really understood. This will increase Berkshire’s returns over time, but at the expense of higher volatility.

2025 has been one of the toughest years to invest since the Great Financial Crisis in 2008-09. Traders will be happy to see it end. Therefore, expect a slow-motion shutdown after the Fed interest rate decision on December 10. Almost all of the action has been confined to 10 stocks making up 40% of market capitalization. Risks are rising.

With the wisdom of 20/20 hindsight, let me review what I did right in November for your edification.

*I kept positions small and 70% cash
*I stopped out of losers quickly. Hope is not an investment strategy
*I only bought the next rotation in the market, interest-sensitive
*I bought Cadillacs at Volkswagen prices
*I avoided all crypto plays
*I didn’t let talking heads convince me that this was the bottom
*I used the volatility spike as a signal to buy, not sell

Stick to these rules, and you too can avoid the sticks and stones the market will hurl at you.

Of course, I have the advantage of backup from a 15-man global research team, which most major hedge funds have. Add in my own labor, and that works out to 700 hours of research a week just to create one or two investment ideas. I doubt you have 700 hours a week to manage your IRA or 401k, so I am making mine available through this newsletter.

I closed out November up +0.38%. Most other trades were down. That takes us to a year-to-date profit of +59.75%. My trailing one-year return stands at +64.59%. That takes my average annualized return to +50.72%, and my performance since inception reaches a new all-time high of +811.64%. These are all non-compounded numbers.

My three November long positions in Netflix (NFLX), Goldman Sachs (GS), and Zoom (ZM) all expired at max profit. I have two more December longs in Morgan Stanley (MS) and Gold (GLD). That leaves me 20% long and 80% in cash awaiting the next market bottom, where I will try to buy into the year-end rally.

I am betting big that the interest rate-sensitive trade will return. With the deep in the money call spreads I use, we should make a maximum profit on every trade, whether we grind sideways before the big move, or not.

Some 63 of my 70 round-trip in 2023, or 90%, were profitable. Some 74 of 94 trades were profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.

Try beating that anywhere.

Fed Beige Book Comes in Unchanged. The high-end consumer is strong, and the low end is suffering. Food assistance requests are soaring as unemployment increases. AI is replacing entry-level positions, curbing new hiring. Health insurance costs are increasing. Tariffs are crushing margins at small companies.

Chicago Purchasing Manufacturing PMI Crashes to 36.4. The index has been recessionary for two years now. The Chicago Business Barometer fell to 36.3 in November 2025 from 43.8 in the prior month and against market estimates of 44.3. This was the 24th consecutive month with readings below the neutral 50 threshold, signaling a solid contraction in Chicago’s economic activity and the sharpest since May 2024. The sub-indexes of new orders, production, and employment all declined. Meanwhile, supplier deliveries went up.

CME Crashes on Data Center Failure. A data center in Aurora, Illinois, that serves as the primary hub of digital operations for CME Group Inc. experienced a malfunction in its cooling system, taking down virtually all CME futures and options trading platforms. The facility, which is operated by CyrusOne, is a critical piece of infrastructure to global markets, with at least $25 quadrillion of notional trade volume passing through it every day. The incident has raised questions about the design of the cooling system and the disaster recovery plans in place, with experts noting that data centers of this type typically have redundancy to avoid such problems with power and cooling. A preview of our future?

2026 will be a Blowout Year for Copper. Costas Bintas, the high-profile head of metals at Mercuria Energy Group, Ltd., has renewed his bullish prediction for copper prices as he warned that a rush to ship metal to the US risks draining the rest of the world’s inventories. Traders have been ramping up shipments to the US in recent weeks to once again capitalize on a big premium for metal on New York’s Comex exchange, fueled by ongoing uncertainty about the potential for future tariffs. Buy (FCX) on dips.

US Dollar Dives as Fed Cut Looms. The U.S. dollar headed for its steepest weekly drop in four months on Thursday as investors bet on further monetary easing. The U.S. dollar index was up 0.05% at 99.58, having retreated from a six-month high hit a week ago to head for its largest weekly drop since July. It is currently down 0.60% on a weekly basis.

Weekly Jobless Claims Fall 6,000, to 216,000. The number of Americans filing new applications for unemployment benefits fell last week, pointing to still-low layoffs, though the labor market is struggling to generate enough jobs for those out of work amid lingering economic uncertainty. Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 216,000 for the week ended November 22, the Labor Department said on Wednesday.

US Oil Rigs Count Hit Four-Year Low, U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in four weeks, with oil rigs dropping to a four-year low, energy services firm Baker Hughes said in its closely followed report on Wednesday.
The oil and gas rig count, an early indicator of future output, fell by 10 to 544 in the week to November 26, the lowest since September.

Bitcoin May Remain Weak Until Year’s End. The declines come amid liquidations of highly leveraged crypto positions, with traders pulling out of risk-on investments into risk-off assets such as gold due to mixed economic data and worries about valuations in artificial intelligence stocks. Some long-term bitcoin holders are also selling some of their holdings at this time due to a popular, but controversial, belief that the token’s “halving” schedule dictates its trajectory according to predictable four-year cycles. The next bitcoin halving is expected to occur mid-2028, when the number of blocks hits 1,050,000.

Consumer Confidence Hits Seven-Month Low, US consumer confidence took a nosedive in November as Americans saw sour signs ahead for the economy. The Conference Board’s reading hit 88.7 in November, down 6.8 points from October’s level of 95.5. Its measure of consumers’ short-term expectations for income, business, and labor market conditions also dragged lower to 63.2, remaining well below the threshold of 80 that the Conference Board says typically signals a recession ahead. November was the tenth consecutive month the reading was sub-80.

Retail Sales Gained 0.2% in September, far less than expected. Groceries were strong, but auto sales and online sales were weak. US retail sales rose modestly in September, with the value of retail purchases increasing 0.2% after a 0.6% gain in August. The slightly weaker-than-expected report suggests a somewhat softer fourth quarter, but some retailers like Kohl’s Corp., Abercrombie & Fitch Co., and Best Buy Co. have upgraded their outlooks for the remainder of the year.

The Bond Market May Cap AI Spending. Investors are growing uneasy that the rapid rise in public debt used to bankroll AI investments could strain the U.S. corporate bond market and eventually dampen the appeal of tech stocks, despite leverage across most major companies remaining low for now. Big tech firms are turning aggressively to the debt markets in their race to build AI-ready data centers, a shift for Silicon Valley firms that typically relied on cash to fund their investments. Since September, public bond issuance by four of the major cloud computing and AI platform companies known as “hyperscalers” has hit nearly $90 billion, with Google owner Alphabet (GOOGL) selling $25 billion in bonds, Meta (META) $30 billion, Oracle (ORCL)$18 billion, and Amazon (AMZN) the most recent, $15 billion. Only Microsoft (MSFT), the fifth one, has not tapped the debt market in recent weeks.

Moderna (MRNA) is the Most Shorted Stock in the S&P 500, with the shares hitting a post-COVID low at $23.72, down 95.4% from the high. Some 18.29% of its shares are sold short. Consumers are skipping the vaccine maker’s jabs now that Covid is at a low ebb. Concerted attacks from the US Department of Health and Human Services don’t help either. The company doesn’t make money.

My Ten-Year View – A Reassessment

We have to substantially downsize our expectations of equity returns over the next four years. My new American Golden Age, or the next Roaring Twenties, is now looking at multiple gale-force headwinds. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old. My Dow 240,000 target has been pushed back to 2035.

On Monday, December 1, at 8:30 AM, the ISM Manufacturing PMI is out.

On Tuesday, December 2, at 8:30 AM, the Redbook is announced.

On Wednesday, December 3, at 8:15 AM, Industrial Production is disclosed.

On Thursday, December 4, Weekly Jobless Claims are published.

On Friday, December 5, the University of Michigan Inflation Expectations is published. At 10:00 AM, we obtain the Baker Hughes Rig Count.

As for me, when the Cold War ended in 1992, the United States judiciously stepped in and bought the collapsing Soviet Union’s entire uranium and plutonium supply.

For good measure, my client, George Soros, provided a $50 million grant to hire every Soviet nuclear engineer. The fear then was that starving scientists would go to work for Libya, North Korea, or Pakistan, which all had active nuclear programs. They ended up here instead.

That provided the fuel to run all US nuclear power plants and warships for 20 years. That fuel has now run out, and chances of a resupply from Russia are zero. The Department of Defense attempted to reopen our last plutonium factory in Amarillo, Texas, a legacy of the Johnson administration.

But the facilities were deemed too old and out of date, and it is cheaper to build a new factory from scratch anyway. What better place to do so than Los Alamos, which has the greatest concentration of nuclear expertise in the world?

Los Alamos is a funny sort of place. It sits at 7,320 feet on a mesa on the edge of an ancient volcano, so if things go wrong, they won’t blow up the rest of the state. The homes are mid-century modern, built when defense budgets were essentially unlimited. As a prime target in a nuclear war, there are said to be miles of secret underground tunnels hacked out of solid rock.

You need to bring a Geiger counter to garage sales because sometimes interesting items are work castaways. A friend almost bought a cool coffee table, which turned out to be part of an old cyclotron. And for a town designing the instruments to bring on the possible end of the world, it seems to have an abnormal number of churches. They’re everywhere.

I have hundreds of stories from the old nuclear days passed down from those who worked for J. Robert Oppenheimer and General Leslie Groves, who ran the Manhattan Project in the early 1940s. They were young mathematicians, physicists, and engineers at the time, in their 20s and 30s, who later became my university professors. The A-bomb was the most important event of their lives.

Unfortunately, I couldn’t relay this precious unwritten history to anyone without a security clearance. So, it stayed buried with me for half a century, until now.

Some 1,200 engineers will be hired for the first phase of the new plutonium plant, which I got a chance to see. That will create challenges for a town of 13,000 where existing housing shortages already force interns and graduate students to live in tents. It gets cold at night, and it dropped to 13 degrees F when I was there.

I was allowed to visit the Trinity site at the White Sands Missile Test Range, the first visitor to do so in many years. This is where the first atomic bomb was exploded on July 16, 1945. The 20-kiloton explosion set off burglar alarms for 200 miles and was double to ten times the expected yield.

Enormous targets hundreds of yards away were thrown about like toys (they are still there). Half the scientists thought the bomb might ignite the atmosphere and destroy the world, but they went ahead anyway because so much money had been spent, 3% of US GDP for four years. Of the original 100-foot tower, only a tiny stump of concrete is left (picture below).

With the other visitors, there was a carnival atmosphere as people worked so hard to get there. My Army escort never left me out of their sight. Some 78 years after the explosion, the background radiation was ten times normal, so I couldn’t stay more than an hour.

Needless to say, that makes uranium plays like Cameco (CCJ), NextGen Energy (NXE), Uranium Energy (UEC), and Energy Fuels (UUUU) great long-term plays, as prices will almost certainly rise, and all of which look cheap. The US government’s demand for uranium and yellow cake, its commercial byproduct, is going to be huge. Uranium is also being touted as a carbon-free energy source needed to replace oil.