“To appreciate the beauty of a snowflake it is necessary to stand out in the cold.”
-Aristotle
Here’s what you need to know this week:
- Stocks post strong gains on a slow week
- Investors are optimistic heading into a pivotal announcement from the Federal Reserve
Thankful
Markets came roaring back last week despite a shortened holiday week. The technology sector led the rebound due to multiple strong headlines in the A.I. space, particularly the impressive performance from Google’s new Gemini 3 model. The other main cause for the surge is increasing expectations of an interest rate cut next week (more on that below). The S&P 500, NASDAQ and Dow Jones all posted gains of 2%+ and are all within 1.5% of hitting new all-time highs.
Final Fed Week
The Federal Open Market Committee (FOMC), the governing body that determines interest rate policy, holds their final meeting of the year next Tuesday and Wednesday and will announce their decision next Wednesday at 1:00 PM CT. Previous ambiguity surrounding this decision caused some market turmoil in the last few weeks but investors have grown increasingly confident that the Fed will once again cut interest rates by 25 basis points (0.25%). As of writing, the bond market is assigning a 90.2% chance of a rate cut next Wednesday, up dramatically from the 60% odds just a month ago[1].
Overshadowing this decision is a changing of the guard at the Fed’s helm. Fed Chair Jerome Powell was originally nominated to his role by President Trump in 2018 and renominated by President Biden in 2022, but President Trump has been a vocal critic of Powell this year and has made clear that he has no plans to renominate Powell. The nomination process for Powell’s successor will formally begin in February, but President Trump told reporters on Sunday that he has already chosen Powell’s successor[2].
President Trump’s criticism of Powell is largely due to Trump wanting larger and more frequent rate cuts, which tend to relieve an ailing employment market but may also increase inflation. The current favorite is Kevin Hassett, a longtime economic advisor to the president and a vocal advocate for more aggressive rate cut policy:
If President Trump announces the nomination soon it may kneecap Powell’s perceived power as Fed Chair, since any moves he makes may potentially be undone by the next Chair. Interest rate cuts and hikes have been the headliners for the last few years, but the drama surrounding the Fed Chair looks poised to take center stage over the next few months.
What Else
- US envoys are currently visiting Russia to continue negotiating an end to the war between Russia and Ukraine
- A fire in a high-rise condo building in Hong Kong has claimed the lives of at least 128 people with dozens more still missing
- Hamas handed over the final two bodies of deceased hostages to Israel as part of a ceasefire agreement
- President Trump has threatened military action in Venezuela as tensions continue to rise surrounding US military strikes on boats in the Caribbean
- OU defeated LSU 17-13, more than likely securing the Sooners a CFB playoff berth; the official bracket will be announced this Sunday, December 7th
What We’re Reading
One of the most dramatic polar vortexes on record is expected to drop into the United States this week, reaching all the way from the Canadian border down to northeastern Oklahoma. Meteorologists at AccuWeather have put together a definitive explainer on how polar vortexes are created, how they move, and an expected timeline for this week. Click below to learn more:
What’s Happening Downtown
Scissortail Park is launching the brand new Sparkle Holiday Market at Scissortail Park this Friday, December 5th. This market will feature local vendors, seasonal treats, warm beverages and hand-made gifts. The market will from 5:30-9:30 PM every Friday from now until Christmas, click below to learn more:
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Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess