It’s been a good week for equities, and in the early going, that strength is continuing. Gold and silver are modestly higher, though crude oil is pulling back. The dollar is up a bit along with Treasuries.
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The stock market is rallying, flight cancellations are dropping, and back pay is coming for furloughed federal workers. That’s because the government shutdown should officially end after a House vote and presidential signature today.
Congress still has backlogs of legislation to work through – and it will take several days for the federal government machine to crank back up. But for investors, the end of past government shutdowns has been followed by relatively solid performance, as you can see in my Chart of the Day article. The SPDR S&P 500 ETF (SPY) is up 17.5% year-to-date.
SPY, IFNNY, AMD (YTD % Change)
Data by YCharts
Could the Federal Reserve sit tight rather than cut interest rates at its final meeting of 2025? That’s the question this Wall Street Journal article raises – and the fact it’s written by “Fed Whisperer” Nick Timiraos makes it worth noting.
The piece highlights the increasing divergence between hawks worried about inflation and doves worried about labor markets. That signals another cut at the Dec. 9-10 gathering isn’t a done deal. Rate futures markets are pricing in a 65% chance of a cut, though.
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Finally, chipmakers are having a good day globally, with shares of Germany’s Infineon Technologies AG (IFNNY) surging almost 10%. The firm’s automotive end market remains weak. But solid demand for Artificial Intelligence infrastructure like data centers – and the tech gear that goes into them – is boosting sales overall. Here in the US, shares of Advanced Micro Devices Inc. (AMD) are popping after CEO Lisa Su said AI demand would drive sales up 35% in the next five years. Revenue will be around $34 billion in 2025.
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