1. November’s job growth was not as strong as the headline number suggests.

One chart that warrants further investigation is the YoY change in employment level falling into negative territory for the first time since 2010 (excluding Covid).

Interestingly, the types of declines we’ve seen recently are indicative of a recession, but maybe this time truly is different.

What’s clear is that the labor market’s deceleration (not crash) continues, making it crystal clear for the Fed’s final meeting of 2024 in two weeks.

2. Is this wildly overvalued stock market doomed? Yes, but maybe not yet.

Here are two particularly scary forecasts for investors: Goldman Sachs thinks the S&P 500 will make just 3% a year over the next 10 years, as Big Tech dominance eventually falters. Bank of America expects 0%-1% a year for a decade, a catastrophic investment prospect.

Their conclusion: Buy stocks anyway, because the next year looks great.

The underlying problem is simple to understand, and hard to do much about.

Stocks are super expensive on just about every measure. That historically has meant low returns in the long run. Hence the dire 10-year forecasts.

But history also suggests no link at all between expensive valuations like we have today and returns over the next year.

Expensive stocks can always get more expensive, and often do.

3. Where did Wells Fargo’s 7,007 come from?

“In simplest terms, forwarding the market's current 22x 2025E EPS valuation to 2026E suggests that one year from now the SPX would be around 7,000 ($318.50 EPS for 2026 @ 22x = 7007),” Wells’ team wrote.

And year-end targets “should be viewed as a compass as opposed to a GPS.”

4. Google CEO Sundar Pichai says AI progress will get harder in 2025 because “the low-hanging fruit is gone”.

5. Waymo causing ripples.

Uber and Lyft slid last week after Google's sister company Waymo announced plans for a wide launch in Miami in 2026.

The service is already doing 150,000 trips per week in Phoenix, LA, San Francisco, and Austin.

The self-driving race between Big Tech, Big Taxi, and Big Auto seems poised to heat up.

6. Trump’s return brings new risks for the energy sector in 2025.

Oil prices have declined this year, and faltering demand growth in China is not pointing to any improvement.

BofA’s Global Commodity Research projects Brent to average $65 and WTI $61 next year, about 20% lower than this year’s averages.

Due to the headwinds, energy companies have been a key contributor to earnings downgrades in Europe.

Estimated earnings per share are expected to drop in 2024 and 2025, making the sector the only negative contributor to Stoxx Europe 600 earnings in 2025.

To be sure, the sector may have limited downside thanks to low valuations at a forward P/E of 9.

7. For the geeks: How do you compare the different AI models?

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