Trump's Fed Pick: Markets Shrug, Crypto Swings
Market Reactions and Presidential Bets
Dow Jones futures dipped Sunday night, a knee-jerk reaction maybe, but hardly a market collapse. Trump's hinting at his Fed chair pick is the headline, overshadowing, at least for the moment, a solid week for stocks. Up 3.2% on the Dow, 3.7% on the S&P, and a hefty 4.9% jump for the Nasdaq. The market's been on a tear, reclaiming its 50-day moving averages like a general retaking lost ground.
The Kalshi prediction market puts Kevin Hassett's odds at 72%. Hassett's a known quantity, a Trump loyalist. So, is this a gamble, or is Trump just doubling down on what he perceives as a winning hand? It’s worth remembering Trump's past criticisms of the Fed, how he wanted lower rates, almost constantly. Choosing Hassett suggests continuity, a refusal to let the Fed stray from the path Trump set. According to
Dow Jones Futures Fall; Trump Says He's Made Fed Chief Decision, Trump has already made his decision regarding the Fed chair.
The cryptocurrency rebounded solidly last week to $91,225.90 as of 4 p.m. ET Friday. Bitcoin falling to nearly $87,000. A volatile asset indeed.
## NVDA's Dip: Cracks in the AI Narrative?
Sectoral Shifts and Individual Stocks
Vertiv (VRT), JPMorgan Chase (JPM), Expand Energy (EXE), Delta Air Lines (DAL) are all actionable. Expand Energy is on IBD Leaderboard. Vertiv stock is on the IBD 50. Vertiv, a play on AI infrastructure, jumped 12.45% for the week. JPMorgan rallied 5%. Delta Air soared 9.4%. These aren't just random pops; they're indicative of a broader trend. Money is flowing into infrastructure, financials, and travel. It is a broad-based leadership.
Nvidia (NVDA), however, is the outlier. Down 1.1% amid concerns about Google's custom chips. This is the part of the report that I find genuinely puzzling. NVDA is not participating in the recovery. Is this a temporary blip, or is it a sign that the AI narrative is starting to fragment? The VanEck Vectors Semiconductor ETF (SMH) leaped 7.9%, despite Nvidia being the No. 1 holding. It shows the strength of the sector, but also highlights Nvidia's relative weakness.
The Innovator IBD 50 ETF (FFTY) jumped 7.65% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 3.2%, with CrowdStrike stock a significant holding. ARK Innovation ETF (ARKK) spiked 9% last week and ARK Genomics ETF (ARKG) 7.3%. SPDR S&P Metals & Mining ETF (XME) surged 10.3% last week. U.S. Global Jets ETF (JETS) ascended 7.3%, with Delta Air stock a key component. SPDR S&P Homebuilders ETF (XHB) stepped up 4.55%. The Energy Select SPDR ETF (XLE) climbed 1.4% and the Health Care Select Sector SPDR Fund (XLV) advanced 1.8%. The Industrial Select Sector SPDR Fund (XLI) picked up 2.65%. The Financial Select SPDR ETF (XLF) climbed 3.3%, with JPMorgan stock a huge holding.
China's factory activity fell 0.6 point in November to 49.9, unexpectedly contracting, according to a private survey. China's official manufacturing gauge edged up 0.2 point to 49.2, also still below the break-even 50 level.
Hassett: A Safe Bet in a Risky Market?
So, what does it all mean? Trump's Fed pick is the linchpin. Hassett represents a continuation of Trump's policies. But here's the rub: is that what the market *needs* right now? The market's rallying, but it's fragile. Nvidia's struggles are a warning sign. A predictable Fed chair might calm some nerves, but it also risks stifling the very innovation that's driving the rally.
I've looked at hundreds of these economic reports, and the degree of uncertainty is unusually high. The China data is weak, oil prices are rising, and the Fed is stuck between a rock and a hard place. Trump's choice is either a calculated risk to maintain control, or it's a gamble that could backfire spectacularly. We are waiting for the announcement.
Sticking with the Devil You Know
The market is acting well. Investors can continue to gradually make new buys if the market rally continues to act well. The stock market had a surprising rebound. Market leadership has broadened out.
A Calculated Risk, or a Recipe for Disaster?
Trump's about to roll the dice again. Whether it lands on a seven or snake eyes remains to be seen.
