Welcome to winter!

It’s not even a full week into 2025, and the U.S. and Canada are already getting their first real snowstorm. Some areas will see sleet, ice, and high winds as well: the full frozen enchilada.

Certain cities are expecting up to a foot of snow. Crazy enough, Arkansas, Louisiana, Mississippi, and Alabama are even on tornado watch. And, overall, more than 60 million people are under winter-weather advisories here in the U.S.

Hopefully you didn’t have any travel plans, since airlines were already canceling flights left and right over the weekend. And, today, schools and government departments are closing down or issuing work-from-home mandates.

None of that means we don’t have news to discuss, though. The world is still turning and business keeps happening, as these next four stories should show.

As for the fifth one, that’s about making your own news… even when things feel like a wintry mess.

Santa Claus Barely Showed Up

A stock market Santa Claus Rally happens when stocks rise during the last five trading sessions in December and the first two of January. In which case, we didn’t really see one this time around.

The S&P 500 Index fell on December 27… 30… 31… and this past Thursday, the first trading day of 2025. So did the Dow Jones. And while the Nasdaq managed to end in the green those first two days, they fell along with everything else right before and after New Year’s Day.

You may have read an article or two about how important the Santa Claus Rally is: how it’s an omen for how the rest of the year will go. After all, since 1950, the S&P 500 has returned an annual average of 10.4% after a successful Santa Claus Rally, according to LPL Financial.

When one fails to materialize, that figure falls to 5%.

So are we in for a lukewarm turn around the sun? I don’t think so.

First of all, the S&P 500 rose 23% this past year. Pullbacks from that euphoric activity are actually healthy and should even be considered welcome, no matter when they take place.

Secondly, stocks did end up rising across all three big U.S. indices, plus the Russell 2000, on Friday. It might not have been enough to make up for all the slides of the previous four trading days. But they still each rose a nice amount.

Finally, the anti-regulation, lower-tax promises of the incoming Trump administration bode very well for business. It might take some time to get it all implemented, but mere talk about it has already bolstered economic confidence across the American board.

And, really, I don’t see that enthusiasm fading any time soon.

Bitcoin Lost Some Steam in December

You probably remember how Bitcoin closed over 106,600 mid-December, prompting calls for it to hit $200,000 – even $250,000! – by the end of 2025. But the rest of the month was a definite letdown.

By December 18, it had dropped to $96,475.

By December 23, it had sunk to $92,904.

And while it rebounded a bit from there, it still closed the year at “just” $93,619.

Even so, Bitcoin ended the year up more than 120%. So those who held it straight through made a very nice amount of money. And if they keep holding it, they could make more still.

Cryptocurrency analysts believe 2025 will be a banner year for Bitcoin and its rivals. (At least the reputable ones.) And they may very well be right.

As I’ve mentioned in previous posts, President-elect Donald Trump has made positive comments about deregulating the assets. And we might even see Congress pass pro-crypto legislation.

Already, Bitcoin bumped up to $96,701 on January 2. And it was worth $99,463 as of this morning when I last checked.

But if you’re going to invest in expectations of another bull run here, just remember you’ll probably have to hold on for a whole lot of bucking. Cryptocurrency is about as volatile an investment as you can find.

A Tale of Two Real Estates

European real estate actually didn’t do too bad last year, everything considered.

CBRE reported late in November that investment volumes were showing “a positive trend for the first time since 2022, totaling €182bn over the past 12 months.” This represented a “13% increase in the first three quarters of 2024 compared to the same period the previous year,” with the “living, industrial,” and hotel sectors standing out especially.

Even the beleaguered office sector bumped up – though that recovery is expected to be lopsided from here. Class-A buildings are fetching better and better prices, you see, while everything else is still struggling.

The rest of the real estate market, however – both commercial and residential – should continue to rise.

Again, that’s in Europe though. Here in the U.S., it’s a bit more of a mixed bag.

My regular readers know I’m bullish on the rentable side of the equation. And it turns out I’m not alone. JPMorgan Chase (JPM) released a report late last week on how “the industry may be on the upswing” after “years of high inflation and limited growth.”

The industrial sector, it says, looks especially inviting, with multifamily and retail standing out. JPMorgan quotes Manulife Investment Management’s Victor Calanog, global head of research and strategy and real estate private markets, as saying:

The industry is poised to be in a better place compared to the last few years. It appears that the landing will be relatively soft, so that should mean continued positive momentum for economic activity, benefiting leasing and income drivers, including rents and occupancies.

And you’d better believe I’m on top of that activity!

But then there’s the housing market. Median home prices have risen around 30% since 2019 – a percentage income increases just can’t compete with. Plus, property taxes are up, and interest rates aren’t likely to make any significant drops anytime soon.

All things considered, Realtor.com Chief Economist Danielle Hale expects existing home sales to rise 1.5% this year to 4.07 million. Compare that to an annual average 5.28 million between 2013 and 2019.

In short, it’ll be better than last year.

It just might be by a negligible amount.

Biden Tells Nippon Where to Take Its U.S. Steel Acquisition Attempts

The big news on Friday, meanwhile, was that Biden blocked Japan’s Nippon Steel from buying United States Steel (X). “This acquisition,” he said, “would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”

On the other end of the opinion spectrum, however, the two companies aren’t finished fighting. U.S. Steel spent untold time and money lobbying the Biden administration last year to approve the deal, and it maintains that the president’s position just isn’t true.

It and Nippon issued a joint statement on Friday, expressing their “dismay” with the decision and saying that it:

… reflects a clear violation of due process and the law governing [the Committee on Foreign Investments in the U.S.]. Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda. The president’s statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision. Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights.

And I’m sure they will. Problem is, they’re not going to find any sympathy from the incoming administration either. Trump wrote on Truth Social last month that he was “totally against the once great and powerful U.S. Steel being bought by a foreign company.”

Who says Republicans and Democrats have no common ground to stand on?

A Shout-Out to My Team Member, Nick Ward

Did you read The Wall Street Journal last Sunday? Not yesterday, but December 29.

If you did, you might have noticed an article under Personal Finance titled “Even Rich Retirees Fear Outliving Their Money.”

I didn’t read it, but Wide Moat Research Analyst Nick Ward did. And he cited it in Friday’s Wide Moat Daily.

I’m so glad he did, because the final result was a powerful reassurance to everyone who’s feeling financially lost. Including retirees.

According to WSJ:

Retirees worry they will live too long to enjoy their money. Studies show those who spend more report greater satisfaction in retirement. Yet older Americans often live below their means. The prospect of a life of 95 or 100 years turns many into penny pinchers, reluctant to spend their hard-earned savings now with so many years of bills remaining.

The past four years of inflation, of course, have contributed heavily to that stress.

Nick, the father of two young children, is hardly close to retirement himself. But he recently had a chance encounter with a wealthy retiree who wasn’t sure he had the money to really visit his grandkids anymore.

“I was honestly floored,” Nick writes. This gentleman “had a successful career. And he owned houses in two of my favorite vacation destinations. If this guy was worried about money in retirement, what hope was there for the rest of us?”

If you’re a retiree concerned about how much you have for how long – or even someone with plenty of time left before you’re in your golden years – I highly recommend you read the rest of what Nick had to say.

Who knows how much stress it could help you avoid in this brand-new year of ours.

Regards,

Brad Thomas
Editor, Wide Moat Daily