😎 Market Vibes

🫨 Defense Budgets, Bitcoin Wobbles, and the Fed's Next Move

Defense contractors just got whiplash-inducing signals from Trump, futures are pulling back from records as traders await labor data, and Bitcoin is testing critical support near $90K. Meanwhile, institutional money is making calculated moves in AI chips, precious metals, and energy—shifts that won't make headlines until they've already happened. Here's what's actually moving markets this morning.

💪 Defense Stocks Get a Trump Boost (After Getting a Trump Bruising)

Talk about whiplash. Defense contractors are staging a premarket comeback after President Trump pulled a classic Trump - threatening them one day, then promising them the moon the next. Yesterday, he said defense majors couldn't do buybacks or dividends unless they ramped up production. Today? He's calling for a $1.5 trillion defense budget for 2027 - that's 50% more than the $901 billion approved for 2026.

Northrop Grumman and Lockheed Martin are both up around 7-8% in premarket trading, basically doing the financial equivalent of dusting themselves off after yesterday's 5% haircut. RTX - which Trump specifically called out as slow to invest - is up 4%, proving that even presidential shade can't keep a good defense contractor down when there's a trillion-dollar budget on the table. General Dynamics is up 5%, also set to retrace its declines.

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🔻 Futures Retreat as Reality Sets In

After hitting fresh record highs, the market is taking a breather this morning - and by "breather," we mean futures are red across the board. S&P 500 futures are down 0.2%, Nasdaq 100 futures dropped 0.2%, and Dow futures are off 0.4%. Nothing catastrophic, just your standard post-record pullback as traders await today's jobless claims data.

The market closed mixed yesterday - the S&P 500 fell 0.34% to 6,921, the Dow dropped 0.94% to 48,999, while the tech-heavy Nasdaq managed to squeeze out a 0.16% gain to 23,584. Classic divergence between the blue-chip oldsters and the AI darlings.

Market observers are now watching for this morning's initial jobless claims report, expected around 213,000 versus the previous week's 199,000. The 10-year Treasury yield is hovering near 4.14%, while continuing claims are expected at 1,900K compared to the previous 1,866K. The big question on Wall Street: can the labor market cool just enough to keep eventual Fed rate cut possibilities alive without tipping into recession territory?

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😰 Bitcoin's $90K Blues Continue

Bitcoin is still hanging around $90,000, down 2.2% over the last 24 hours, and the crypto market is feeling the pressure from macro headwinds. Specifically, that pesky U.S. employment data that's making everyone rethink their Fed rate cut expectations.

Here's the paradox: job openings fell to 7.1 million (not great for the economy), but that's actually decreasing the probability of a January 2026 rate cut because it suggests the labor market is cooling just enough that the Fed can keep rates "higher for longer." When rates stay elevated, Treasury bonds look more attractive than risky assets like Bitcoin, which triggers sell-offs. Classic.

Making matters worse, U.S. spot Bitcoin ETFs recorded significant outflows - over $243 million in recent sessions - signaling that institutional demand is cooling after fueling the early New Year rally. Meanwhile, 99Bitcoins analysts note that Bitcoin is the only top-20 digital asset in the green today, up a modest 0.5%, while the rest of the market continues to bleed.

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💨 Gold Takes a Breather, But Don't Call It a Correction

After absolutely ripping to start the year, gold is taking a pause around $4,440 per ounce, down slightly as traders lock in profits and shift focus to incoming U.S. economic data. Geopolitical concerns have eased somewhat after President Trump said Venezuela would supply up to 50 million barrels of oil to the U.S., which temporarily reduced safe-haven demand.

But don't mistake this for a trend reversal. Gold just posted its best annual performance since 1979, and the structural tailwinds remain firmly intact: declining real yields, elevated government spending, ongoing central bank buying, and a dollar that's losing its grip on global dominance.

Friday's nonfarm payrolls report will be the next catalyst. Markets are currently pricing in two rate cuts for the year, and if employment data comes in weak, that could reignite the rally. FOMC member Neel Kashkari recently noted that rising unemployment could increase the likelihood of rate cuts.

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🤖 CES 2026: AI Hype Meets Reality Check

CES 2026 wrapped up this week in Las Vegas, and if you thought the AI party was over, think again. Nvidia CEO Jensen Huang launched the company's next-generation Vera Rubin AI superchip platform, while AMD CEO Lisa Su countered with a first look at its rival Helios system. Huang's message? "Demand for Nvidia GPUs is skyrocketing... because models are increasing by a factor of ten, an order of magnitude every single year."

But here's where it gets interesting: Wall Street is starting to differentiate between AI winners and losers. Nvidia's stock is down about 8% from its October 29 record high, losing $460 billion in market value as market observers grow concerned about sustainability of AI spending and increased competition.

AMD, meanwhile, is projected to see data center revenue jump 60% to almost $26 billion in 2026 as it wins big orders from OpenAI and Oracle. The real wildcard? Custom chips. Alphabet, Amazon, and Meta are all developing their own AI accelerators, which could eat into Nvidia's dominant 90%+ market share of AI accelerators.

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🛢️ Oil's Venezuelan Hangover

Oil prices are in a weird spot. West Texas Intermediate crude is trading around $56-$57 per barrel, caught between competing forces: U.S. plans to take long-term control over Venezuelan crude sales (bearish for prices) versus ongoing geopolitical tensions and OPEC+ production management (bullish for prices).

Energy Secretary Chris Wright announced the U.S. will market Venezuelan crude oil to the open market, including both stored oil and ongoing production. That's potentially up to 50 million barrels hitting the market, which explains why oil futures initially dropped more than 1.6% on the news before recovering slightly. Wright noted this includes oil currently stored in Venezuela and in barrels on floating storage.

Market watchers note: Forecasts have WTI averaging around $59 in 2026, with sentiment firmly tilted toward further downside unless a clear structural shift emerges. Meanwhile, Brent crude was down 0.3% at $60.52 a barrel Wednesday morning after the Venezuela announcement.

📌 The Bottom Line

Thursday's setup is all about the labor market. Futures are modestly lower as traders digest Wednesday's mixed session and position ahead of jobless claims data at 8:30 AM ET and tomorrow's big December jobs report. Defense stocks are the morning's standout performers on Trump's budget bonanza, while crypto continues to struggle near $90K support and gold takes a breather after its stellar run.

The big picture? Markets are trying to figure out if the economy is Goldilocks (strong enough to avoid recession, weak enough for rate cuts) or just lukewarm porridge. Today's jobless claims will provide another data point, but Friday's nonfarm payrolls report will be the real test.

Until then, buckle up for another day of geopolitical headlines, tech earnings speculation, and the never-ending "will they or won't they" drama with the Fed.

✌️ Thanks for vibing with us.

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