💼 The Week We’d Like to Forget but Won’t

Last week was a Shakespearean drama in finance, with everything from Federal Reserve rate cuts to activist investors shaking up industrial giants. Markets oscillated like a toddler on a sugar high—exuberant one moment, crashing from exhaustion the next. Meanwhile, Bitcoin reached a new peak, proving once again that the rules of gravity don’t apply to crypto.

The Market and Post-Election Blues

Last week began with markets brimming with optimism following the U.S. elections. However, by Friday, the euphoria had fizzled. The S&P 500 limped to a mixed close, weighed down by uncertainty over tech stocks and inflation fears. Albemarle (NYSE: ALB), a lithium producer, shone with a 5.2% rally, proving that the “white gold” of EV batteries still has its luster. Meanwhile, Monolithic Power Systems (NASDAQ: MPWR) tumbled as Nvidia hinted it might pivot suppliers.

Point of Interest: Since 2020, the S&P 500 has become so correlated with tech stocks that its performance chart now resembles Tesla’s stock trajectory—a rollercoaster of anxiety.

What This Means:
The markets are uncertain, torn between betting on future growth or safeguarding against today’s economic headwinds. Growth names are taking a hit, and even lithium’s glory days are under scrutiny.

Stock Picks:

• Low Risk: Vanguard Dividend Appreciation ETF (VIG) – Stability with steady dividend payers.

• Medium Risk: Albemarle (ALB) – Riding the lithium wave.

• High Risk: Nvidia (NVDA) – If you like drama, you’ll love this one.

• Wildcard: Livent Corporation (LTHM) – A smaller lithium player poised for acquisition buzz.

Elon Musk Joins the DOGE Pack

In a plot twist worthy of a Netflix biopic, President-elect Trump announced Elon Musk as co-leader of the Department of Government Efficiency (DOGE). Musk promptly tweeted, “Efficiency is just the beginning.” Analysts speculate Musk’s agenda might include fast-tracking EV incentives and regulatory overhauls—or possibly selling flamethrowers to the IRS.

Point of Interest: Tesla (NASDAQ: TSLA) gained $200 billion in market cap last week. That’s more than Ford and GM combined—because who needs fundamentals when you have memes?

What This Means:
While Musk’s involvement is likely to bolster Tesla, his divisive reputation could spark resistance in Washington. It’s a high-risk play, but one that Wall Street seems willing to take.

Stock Picks:

• Low Risk: First Trust NASDAQ Clean Edge Green Energy ETF (QCLN) – Broad exposure to green energy.

• Medium Risk: Tesla (TSLA) – Betting on Musk’s magic.

• High Risk: Lucid Motors (LCID) – The “other” EV company still dreaming of profitability.

• Wildcard: Dogecoin (DOGE-USD) – Just in case Musk decides to back it with federal bonds.

Streaming Wars: The Sequel

Warner Bros. Discovery (NASDAQ: WBD) surged 5.4% after Wolfe Research upgraded the stock, citing international growth potential for its Max streaming platform. The media giant is banking on re-bundling services, proving that every “cutting the cord” innovation eventually leads back to a bigger, shinier cord.

Point of Interest: The average American household now pays for six streaming services. That’s six too many, considering most people just rewatch The Office.

What This Means:
Streaming companies are pivoting back to bundled services to combat declining ARPU (average revenue per user). Expect consolidation and partnerships.

Stock Picks:

• Low Risk: Comcast (CMCSA) – Bundles and broadband go hand in hand.

• Medium Risk: Warner Bros. Discovery (WBD) – International expansion is the name of the game.

• High Risk: Roku (ROKU) – A turnaround story if partnerships materialize.

• Wildcard: CuriosityStream (CURI) – Niche documentaries for when Netflix’s algorithm fails you.

The Layoff Parade Marches On

Unity Software (NYSE: U) axed 1,800 employees, while Block (NYSE: SQ) laid off 1,000. Tech layoffs continue to ripple through the sector as companies prioritize profitability. Unity’s CEO summed it up, saying, “Efficiency is key.” Somewhere, Elon Musk nodded approvingly.

Point of Interest: Tech companies have laid off over 400,000 employees globally in 2024. That’s enough to form a city—and probably still not enough to get Twitter’s algorithm fixed.

What This Means:
The tech sector is tightening its belt, signaling slower growth and fewer moonshot projects. Investors are rewarding leaner operations, but at what cost to innovation?

Stock Picks:

• Low Risk: Apple (AAPL) – Even in turmoil, Cupertino delivers.

• Medium Risk: Block (SQ) – Poised for recovery if it nails fintech innovation.

• High Risk: Snap (SNAP) – Betting on AR dreams in a bleak landscape.

• Wildcard: Matterport (MTTR) – A niche 3D mapping play that’s quietly growing.

China’s Real Estate Tightrope

Country Garden (HK: 2007) narrowly dodged default by securing extensions on debt payments. Yet the broader Chinese property market remains shaky. The government is stepping in with stimulus efforts, but systemic risks linger.

Point of Interest: Chinese real estate accounts for 30% of the nation’s GDP—a fact that should terrify anyone holding yuan-denominated assets.

What This Means:
China’s property woes are a slow-moving crisis. Global investors are wary, but there’s opportunity in related sectors like infrastructure and commodities.

Stock Picks:

• Low Risk: SPDR Gold Shares ETF (GLD) – A hedge against uncertainty.

• Medium Risk: Rio Tinto (RIO) – Infrastructure spending could boost demand for raw materials.

• High Risk: Country Garden (HK: 2007) – If you’ve got nerves of steel, this one’s for you.

• Wildcard: JD.com (JD) – E-commerce resilience in a shaky economy.

The Week Ahead

With Thanksgiving around the corner, markets are poised to reflect on what they’re grateful for (spoiler: it’s liquidity). Keep an eye on retail earnings, as consumer spending could set the tone for 2025. Until next week, stay sharp, stay skeptical, and remember: the best investments are the ones you don’t regret five years later.

Cheers,
The Briefcase Team 💼