Good morning, traders…

Jeff here.

As mentioned yesterday, we’re in the most historically bullish month of the year. 

And it started strong with the NASDAQ up as much as 1.15% intraday on Monday.

Semiconductor names like INTC, SMCI, and AMD are leading the rally with big money flooding into the sector…

Meanwhile, capital is shifting out of some of November’s biggest winners — crypto miners. These stocks enjoyed a massive run last month, but their momentum is weakening to start the month. 

Bitcoin (BTC) is sitting at a critical juncture, hovering just below the $100,000 level. Everyone’s watching for a breakout above this range — as it will likely set off the next major rally in crypto-related stocks. 

I still think this move is inevitable, but a short-term pullback could come first. Trade carefully. 

Additionally, we have some big economic numbers coming out this week that could either add fuel to (or throw cold water on) the Santa Claus rally.

With that in mind, let’s get to my Tuesday Market Outlook for the first week of December…

Major Economic Data on Deck

This week is packed with important economic data…

Tomorrow, the ISM Services report will give us a closer look at economic conditions, particularly in non-manufacturing sectors.

But the highlight of the week is Friday’s jobs number, the last big data release before the Fed makes its next interest rate decision. 

This report will shape market expectations about monetary policy heading into the new year. 

Strong job growth could reinforce the case for maintaining current rate levels, while weaker numbers may inspire the Fed to cut more quickly. 

Institutional traders are already positioning ahead of Friday, locking in profits, hedging, and rebalancing their books to prepare for potential volatility.

The Consumer Stays Strong

While the Fed and Wall Street focus on policy and data, consumers are showing remarkable resilience. 

Last week’s Black Friday numbers highlighted a strong appetite for spending, despite elevated interest rates and persistently higher prices. 

Retail sales posted solid gains, and the holiday movie box office also delivered strong results, showing that consumers remain confident and willing to spend on both goods and experiences.

This strength in consumer behavior provides a solid foundation for the economy, giving businesses the support they need to deliver strong earnings. 

Despite concerns about prices, shoppers continue to carry the momentum forward into the final weeks of the year.

What to Watch in December

Here are the sectors and events I’m watching closely right now:

Semiconductors: Semis are breaking out to start the month after a brief lull following NVDA’s recent earnings report. SMCI, AMD, and INTC were leading the charge yesterday. 

Bitcoin and Crypto: Bitcoin’s price action around the $100,000 mark is critical for crypto markets. A breakout above this level may fuel another surge in crypto-related stocks, while a pullback could create opportunities for more strategic entries.

The Jobs Number: Friday’s report is the most influential data release of the week. Its implications for Fed policy will create both volatility and opportunity.

Year-End Profit-Taking: Institutional funds are closing out the year by locking in profits and rebalancing portfolios. This can cause top-performing stocks (like semis) to keep rising and decimated names to fall further. 

This month is already living up to its bullish reputation. Semiconductors are surging, Bitcoin is approaching a key breakout level, and consumer confidence remains optimistic.

With a packed data calendar this week, there’s no shortage of catalysts to drive the market into year-end.

The focus now is on execution. The most successful traders in December will be those who capitalize on the price action in front of them. 

December is shaping up to be a month of big moves, and the setup is there for a strong finish to the year.

Happy trading,

Jeff

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