Summing Up The Week

While the Federal Reserve prefers to look at the Personal Core Expenditures (PCE) index as a gauge of inflation, the rest of the market also pays attention to the Producer Price Index (PPI) and Consumer Price Index (CPI) with the latter taking more of a focus. This week, both the PPI and CPI printed decent reports on disinflation showing that, while inflation is still increasing in many sectors, it is not increasing as fast as it had been in the past.

Pile on some absolutely stellar earnings reports from the big banks to kick off the new earnings season and the market saw a decent rally throughout much of the week.

Here are the news stories that moved the markets this week…

Market News

Wholesale prices rose 0.2% in December, less than expected

On Tuesday, the Producer Price Index (PPI) showed an increase in prices of 0.2% in December, less than the 0.4% expected by economists and down from 0.4% in November, reported CNBC.

The PPI measures the prices that companies pay for the goods and services they consume to produce their own products. While having the number coming in cooler than expected, any positive number indicates inflation overall.

That being said, any decrease in the rate of inflation (disinflation) is better than an outright increase in the rate of inflation so, initially, stocks rallied after the report was released prior to the market open.

December CPI inflation slows to 0.4% vs 0.3% expectations

On Wednesday, the Consumer Price Index (CPI) showed that inflation slowed to 0.4% in December and 2.9% year-over-year, missing economist expectations for respective readings of 0.3% and 2.9%, reported CNBC. Core inflation, which excludes food and energy, showed an annual rate of 3.2% which was better than the 3.3% forecast.

Disinflation – the decrease in the rate that inflation increases – still seems to be on the side of the bulls showing inflation slowing. For the bulls, combining a decent CPI with excellent earnings from the big banks reporting before the bell on Wednesday (particularly Citigroup (C) and JP Morgan (JPM) which both reported blowout quarters) resulted in a rally throughout the indexes before the market opened.

Consumers continue to spend, but not as much

On Thursday, retail sales figures for December showed a rise of 0.4% from the previous month as shoppers closed out 2024 in a buying mood, reported the Associated Press.

Despite being below economists’ projections, “this was actually a strong report,” said Paul Ashworth, Chief North American Economist at Capital Economics. The sales figure was held down by a sharp drop at building materials stores and a small decline at restaurants. Otherwise, most types of retailers reported solid gains. Ashworth now expects the economy expanded at a healthy annual rate of 2.9% in the final three months of last year, up from his previous estimate of 2.7%.

“Families at the higher end of the income spectrum are doing more than their fair share of consumer spending and remodeling,” Greg Daco, chief economist at EY-Parthenon, Ernst & Young LLP said Monday. “Maybe they’re not moving, but they’re remodeling and they’re buying. Families at the lower end of the spectrum are a little bit more constrained and have more difficulties with this high price environment.”

Stocks initially rallied on the back of the concept of a strong consumer before rolling over midday and finishing flat-to-down.

Next Week’s Gameplan

While we don’t have a lot of datapoints coming out during the shortened trading week next week (due to the Martin Luther King Jr. holiday on Monday), we do have existing home sales and the flash services and manufacturing PMI all coming in on Friday.

Additionally, earnings season has officially kicked off, so reports from different key sectors showing the strength (or weaknessof the U.S. consumer could have a positive or negative effect on investor sentiment.

I’m always a huge fan of earnings season just because I love the wealth of catalysts. Regardless of whether stocks head higher or lower, I find having price action to be a lot more interesting than a never-ending flat consolidation. But, hey, that might just be me!

In the meantime, I’ll meet you all back here next Friday, friends!

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Crytpo Corner

Bitcoin's Road to Nowhere - Get Irked
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Bitcoin Price (in USD)

%

Weekly Change

Bitcoin Price Action

Bitcoin’s Favorite Pastime is Making Fools of Bulls -AND- Bears

Bitcoin saw a bit of a fakeout when the rest of the market staged a mini-panic on Monday with the big orange crypto crashing through key support levels including the $91,187.00 weekly low, but, more importantly, also breaking the key support at $90,682.58.

Bitcoin continued quite a bit lower before finding support at $89,028.64 and bouncing significantly from there as many market participants realized their panic-selling had been an overreaction.

From its low, Bitcoin ripped the faces off the Bears, blowing through last week’s high before setting a new weekly high on Friday at $102,978.59.

The Bullish Case

Bulls wasted no time mocking all the Bears who had been warning Bitcoin was headed to $85K at least when the crypto barely touched near the $89K mark before making a stark reversal and rocketing higher off its low. Bulls believe this renewed momentum may take Bitcoin to new all-time highs within the week thanks to the potential positive news catalyst of a strategic Bitcoin reserve being established shortly after President-Elect Donald Trump’s inauguration on Monday.

The Bearish Case

Bears refuse to relent on their narrative. While Bears concede that Bitcoin’s recovery off its $89K low was impressive, these Bears claim that Bitcoin’s ability to make a new weekly high means that the crypto is simply continuing to trade within a consolidation, and that this week’s break of the weekly-low indicates that the next big move will be to the downside with price claims of $85K, $70K, $67K and lower coming soon to a cryptocurrency exchange near you!

Bitcoin Trade Update

Premium subscribers to Get Irked get access to all the moves I’ve made in my Bitcoin trade over the past week as well as my next thirty (30) … yes, 30 … buys in Bitcoin including price levels, quantities, and a full layout of my ongoing long-term trade in the world’s biggest crypto.

If you aren’t already, subscribe to my Substack today!

Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

  • In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
  • Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
  • In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
  • In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
  • In February 2020, Bitcoin rallied +64% to $10,522.51.
  • In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
  • Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
  • Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
  • In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
  • Later in February, Bitcoin dropped -26% to a low of $43,016.00.
  • In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
  • In June , Bitcoin crashed -56% to a low of $28,800.00.
  • In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
  • In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
  • In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
  • In June, Bitcoin dropped -20% to a low of $24,750.00
  • In July, Bitcoin rallied +29% to a high of $31,862.21.
  • In September, Bitcoin dropped -22% to a low of $24,900.00.
  • In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
  • Later in January, Bitcoin dropped -22% to a low of $38,501.00.
  • In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
  • In August, Bitcoin dropped -33% to a low of $49,050.01.
  • In December, Bitcoin rallied +121% to a new all-time high of $108,388.88.
  • In January 2025, Bitcoin dipped -16% to a low of $91,384.70.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero. I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated less than that to speculating in crypto. I feel that anyone who doesn’t fully believe in the long-term viability of cryptocurrency would be better served not speculating in the space. On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator. If a speculator isn’t confident in the space, the moves will cause mistakes to be made.

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.

Suicide Hotline – You Are Not Alone

Studies show that economic recessions cause an increase in suicide, especially when combined with thoughts of loneliness and anxiety. If you or someone you know are having thoughts of suicide or self-harm, please contact the National Suicide Prevention Lifeline by visiting www.suicidepreventionlifeline.org or calling 1-800-273-TALK. The hotline is open 24 hours a day, 7 days a week.