Daily Newsletter 12/16/25
U.S. employment rebounded in November after October’s government-driven losses, adding 64,000 jobs versus a 105,000 decline the month before. Despite the recovery, the jobless rate rose to 4.6%, the highest in over four years, underscoring lingering economic weakness and boosting expectations of Fed rate cuts next year.
The renewed debate over the Fed’s dual mandate has resurfaced, but we will revisit it after the holidays. The latest economic report did little to shift our view. Deep divisions persist within the FOMC, and significant uncertainties in the broader economy have yet to settle. For now, we believe the most pragmatic approach is to focus on the very short term and capitalize on opportunities through selective short-term option positions.
Following Friday’s sell-off—driven mainly by weakness in AI and tech stocks—markets are searching for direction this morning. Medium-term uncertainty remains elevated, and we continue to view the outlook in two phases: pre- and post-holidays, with specific sectors likely to outperform in each.
Our broader market outlook remains consistent with yesterday’s assessment, both before and after the holiday period, with Chile newly added to our international focus list. Also, Brazil.
We maintain a fully bullish stance on financials, particularly large banks. Our view is moderately bullish on housing, defense, and nuclear-related names, while we remain medium- to long-term bullish on gold, silver, and select commodities beyond these core holdings.
Despite ongoing concerns around AI valuations, indexes are expected to trend higher through the holidays. While weakening U.S. employment data and soft consumer confidence remain a concern, these themes are familiar. A Santa Claus rally still appears probable, with decline likely marking only a temporary pullback.
OUR TRADES
We share all our short-term trades in the Tactical Portfolio exclusively with paid subscribers, showing the exact entry time and price for every trade below. Subscribers receive timely buy and sell alerts via chat. Our approach is eclectic, blending macroeconomic insights with a quantitative methodology. We do not limit ourselves to specific markets or sectors, seeking to profit from any short or very short trade that fits our strategy. We use sophisticated option strategies to capitalize on short-term market movements, ensuring full transparency and prompt exit updates.