Cautious Optimism: Market Trends, Portfolio Moves, and 2025 Prospects

January 6, 2025 Update

This week feels like the real start of the year, with everyone back at their desks, ready for action.

Last week, both the Nasdaq and the S&P 500 finished slightly in the red at -0.51%.

• On the weekly chart, they look healthy.

• On the daily chart, the 10-day and 20-day SMAs are trending down, signaling caution.

On the macro side, the inflation nowcast for December is 2.86%, and for January 2025 it’s 2.89%, suggesting a slowdown.

Oil is relatively low at $77 for Brent, though it has been rising in recent weeks.

The New York Fed’s GDP nowcast for Q4 2024 is 1.9%, and for Q1 2025 it’s 2.1%, with no signs of recession yet.

All in all, it’s a mixed picture.

I’m watching for inflation to stay below 3% and for liquidity not to become restrictive. Credit tightening, after all, is what causes economic slowdowns—or worse, recessions.

We’re walking a fine line right now, s…