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Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:09 AM

December 13, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

The Gmail app usually clips the bottom quarter of our emails, we recommend you reading our full article online here.

The "smart money" isn't on Wall Street. It's on Capitol Hill.

Last week, nine members of Congress filed over 120 trades. We looked at the data, and the split is wild.

One rep on the Homeland Security committee effectively liquidated her portfolio. She dumped 60+ stocks. Tech, defense, banks. Gone.

But a rep on the Armed Services committee? He went on a shopping spree. He bought 26 blue-chip stocks in a single day.

One is betting on a crash. The other is betting on a boom.

Who is right?

These people write the laws. They sit in the classified briefings. And they are moving serious cash right now.

In this week's report, we tracked a $200k bet on Netflix and a $500k move into boring municipal bonds.

Don't trade blind. See exactly what they are buying and selling before the rest of the market catches up.

[Link to Full Report]

What Moved Markets Last Week

The trading week ending December 13, will likely be recorded by economic historians as a moment of profound cognitive dissonance in global capital markets. On the surface, the macroeconomic environment appeared to follow a scripted "soft landing" narrative: the Federal Reserve delivered a third consecutive rate cut, and headline equity indices remained near all-time highs. However, beneath this veneer of stability, structural tremors began to fracture the consensus investment thesis.

The week was defined by two opposing forces: monetary alleviation and technological disruption. While the Federal Open Market Committee (FOMC) reduced the cost of capital to insulate the real economy, the technology sector—the primary engine of S&P 500 earnings growth—faced an existential stress test.

The Federal Reserve: Dovish Actions, Hawkish Undertones

On Wednesday, December 10, the FOMC lowered the federal funds rate by 25 basis points to a target range of 3.50% to 3.75%. This move, priced in with near-certainty, was characterized not as a rescue operation but as an "insurance cut"—a preemptive calibration to sustain expansion amidst cooling inflation.

However, the updated Summary of Economic Projections (SEP) injected a note of caution. The median projection signaled only one additional rate cut in 2026, a forecast significantly more hawkish than the bond market’s aggressive pricing. This divergence suggests the Fed anticipates a higher "neutral rate" (R-star) driven by structural inflationary forces. The decision was not unanimous, with three members dissenting, illustrating a widening ideological rift regarding the appropriate level of restriction.

The Data Void and Labor Anxiety

Investors navigated a "fog of war" due to the delay of the official Bureau of Labor Statistics (BLS) jobs report, caused by the recent government shutdown. In its absence, private-sector proxies painted a disconcerting picture:

• ADP Employment Report: Private employers shed 32,000 jobs in November, a shock contraction concentrated in manufacturing and small businesses.

• Sahm Rule Trigger: Delayed state-level data showed unemployment rising in 25 states. The national unemployment rate ticked up to 4.4%, a level that historically triggers the Sahm Rule recession indicator.

Inflation and Yield Curve Dynamics

While the Fed focused on employment, inflation remained sticky. The PCE price index rose at an annual rate of 2.8% in September, trending downward but still above the 2.0% target. The bond market reaction was counterintuitive: the 10-year Treasury yield rose to 4.19%, a "bear steepening" that signals investors are demanding a higher term premium to hold long-duration government debt amidst fears of reflation and persistent fiscal deficits.

Tech and Growth

The Technology sector, the undisputed leader of the 2024 bull market, faced a "Sputnik moment" this week. The narrative shifted abruptly from limitless growth to competitive commoditization, triggered by a geopolitical shock that questioned the durability of the AI hardware monopoly.

Adding to the volatility were reports alleging that DeepSeek developed its model using thousands of Nvidia’s advanced Blackwell chips, smuggled into China via "phantom data centers." While Nvidia denied knowledge of these illicit networks, the market reacted negatively to the dual risks of regulatory crackdowns and the permeability of the U.S. hardware "moat."

• Nvidia (NVDA): The stock faced intense selling pressure, dropping approximately 7% early in the week before stabilizing to close at $175.02 (-3.3% on Friday). Investors are chaotically repricing the stock's terminal growth rate in a world where AI training costs could collapse.

• Broadcom (AVGO): despite reporting stellar earnings (Revenue +28% YoY; AI Revenue +74%), shares plummeted 11%. This disconnect signals that investors are viewing Broadcom not on its own merits, but as a proxy for the broader AI capex cycle.

The Hyperscalers and Software

• Microsoft (MSFT): The stock retreated to $478.35 (-1%) amidst scrutiny of its projected $80 billion annual capex plan. The DeepSeek development complicates the ROI calculus for Azure; if competitors can offer similar performance at a lower price point, Microsoft’s pricing power could erode.

• Alphabet (GOOGL): Shares fell 2.8% mid-week as reports surfaced of plans to introduce ads into the Gemini AI assistant, highlighting the threat to its core Search monopoly.

• Meta Platforms (META): Reports indicate a pivot away from its open-source Llama strategy toward proprietary, revenue-generating models, likely designed to appease investors demanding returns on massive AI spend.

Consumer Tech

• Tesla (TSLA): The stock closed at $458.96, buoyed by the launch of a paid Robotaxi pilot in Austin. However, valuation remains precarious as the core EV business faces margin compression.

• Salesforce (CRM): showed resilience, trading firmly around $262. Insider buying ($25M by Director Mason Morfit) instilled confidence in the pivot to "Agentforce," suggesting investors view application-layer software as a safer harbor than hardware.

• Netflix (NFLX): The streaming giant endured a six-day losing streak (-15%) catalyzed by rumors of a potential bidding war for Warner Bros. Discovery assets. Investors fear a complex M&A cycle would dilute returns and burden the balance sheet.

• Apple (AAPL): Stock drifted lower to $278.28, weighed down by Berkshire Hathaway's continued liquidation of shares. Warren Buffett has reduced his stake by nearly 70% over two years.

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Banks and Financials

The Financials sector served as the "canary in the coal mine," shifting the narrative from interest rate tailwinds to credit quality and borrower fragility.

JPMorgan Chase: The Warning Siren

The most significant negative catalyst came from JPMorgan Chase (JPM). CEO of Consumer & Community Banking Marianne Lake characterized the consumer environment as "fragile," noting that excess savings buffers have been depleted for the bottom 80% of income earners. More alarmingly, the bank issued guidance for 2026 expenses to hit $105 billion, significantly higher than consensus. This expense bloat, driven by wage inflation and technology investments, suggests a stagflationary headwind. JPM shares fell 4% to close at $318.52.

Payment Processors and Defensive Flows

• Visa (V) and Mastercard (MA): Data corroborated JPMorgan’s caution. Holiday spending is forecasted to grow a tepid 2.2% (real), with consumers "trading down" and relying heavily on credit and "Buy Now, Pay Later" services.

• Berkshire Hathaway (BRK.B): Continued to position for a downturn. With cash reserves at record highs following the sale of Apple and Bank of America shares, the firm acted as a low-beta defensive hold, outperforming the more volatile bank stocks.

Consumer Goods and Healthcare

In a week of volatility, these sectors functioned as a capital sanctuary, bifurcated between high-growth innovation in pharma and defensive resilience in retail.

The GLP-1 Supercycle

• Eli Lilly (LLY): Remains the market's favorite non-tech growth story. Its GLP-1 franchise (Mounjaro, Zepbound) generated $24.8 billion YTD. Shares remained resilient despite news of new oral competition, as manufacturing capacity remains a massive moat.

• UnitedHealth Group (UNH): Navigated volatility related to Medicare Advantage rates. Shares rose 1.52% to $341.84, as investors bet that its vertical integration (Optum) allows it to manage costs better than pure-play insurers ahead of 2026 reimbursement tightening.

Retail Titans: The Value Bifurcation

• Costco (COST): Reported November net sales of $23.64 billion (+8.1% YoY). Its membership model attracts a higher-income demographic resilient to inflation. The stock remains a high-conviction long.

• Walmart (WMT): Is aggressively capturing the "trade-down" consumer, launching AI tools and faster delivery to compete with Amazon. It acts as a counter-cyclical hedge.

• Procter & Gamble (PG): Hit a new 52-week low (~$138) on concerns it has reached the limit of its pricing power and must now pivot to harder-to-achieve volume growth.

Energy and Industrials

This sector presented a picture of strategic ambition clashing with commodity deflation and cyclical stagnation.

Energy: Strategic Growth in a Bear Market

Crude oil (WTI) struggled to hold $57.50, down nearly 20% YoY due to a supply glut from non-OPEC production and anemic Chinese demand.

• Exxon Mobil (XOM): Despite the bearish backdrop, XOM delivered a bullish Corporate Plan update. It targets growing earnings by $25 billion by 2030 with no increase in capex, a testament to efficiency. XOM decoupled from the commodity to close at $118.82, remaining the "quality" trade in the patch.

Industrials: The Housing Freeze

• Home Depot (HD): Offered a cautious outlook at its Investor Day, forecasting fiscal 2026 sales growth of only 2.5% to 4.5%. Management emphasized that the housing market remains frozen by the "lock-in" effect of high mortgage rates. The stock fell as markets realized Fed rate cuts will take 12-18 months to stimulate renovation spending.

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Baked with love,

Anna Eisenberg ❤️