💰 Maniac Minute: The Power of Endless Breadsticks

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Happy Holidays, Maniacs!

Even though last week’s trading screens looked redder than Santa’s suit, we got some sweet gifts: PCE inflation dipped to 2.4%, Q3 GDP growth popped to 3.1%, and Congress finally squeezed out a deal to keep the lights on till March.

Let’s break down the good, the bad, and the downright festive.

Market Recap 📈

After a mid-week meltdown that had investors questioning their life choices, Wall Street finally caught a break on Friday. Stocks rallied hard after cooler-than-expected PCE inflation data—just a 2.4% annual rise—kept the rate cut dream alive.

Central bankers stuck to their guns on Wednesday, lowering rates 0.25% but signaling caution in 2025. Bond yields shot up in response, putting pressure on risk assets. Even Bitcoin, which had been approaching $110,000, slipped back below the $100,000 mark.

Friday’s bounce saw the Dow rocket 500 points and all major indexes climb over 1%. But the damage was done: the Nasdaq snapped a four-week winning streak, the S&P recorded its biggest weekly drop in six weeks, and the Dow notched its third straight weekly loss.

So much for that smooth sleigh ride into the new year!

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Winners & Losers 🚀

Last week, the market showcased a mix of ups and downs: quantum computing soared into orbit while homebuilders struggled to find solid footing. From comfort food success stories to stumbles in the weight-loss race, there was no shortage of action.

Winners

1. Quantum Computing ($QUBT) – Market Cap: $2.1B (+162.8%)

Quantum Computing, whose ticker QUBT nods to the “qubit” (one unit of information in the quantum world), defied gravity after announcing a NASA contract. Its Dirac-3 optimization machine will tackle imaging challenges, finally proving quantum’s practical value. Shares have soared over 1,800% this year, driven by sector enthusiasm and Google’s recent breakthrough in the space.

2. Darden Restaurants ($DRI) – Market Cap: $22.0B (+12.5%)

Darden Restaurants, owner of Olive Garden and LongHorn Steakhouse, served up strong Q4 results and raised its 2025 sales forecast to $12.1B. Same-restaurant sales gains across its biggest brands showed diners are still splurging on comfort food. Strong earnings and buybacks sweetened the pot, proving that breadsticks and dividends are both crowd-pleasers. Even as spending headwinds loom, Darden’s ability to balance growth and shareholder returns has investors asking for seconds.

Losers

1. Novo Nordisk ($NVO) – Market Cap: $396.2B (-20.5%)

Novo Nordisk stumbled after its obesity drug, CagriSema, missed expectations, delivering 22.7% weight loss instead of the promised 25%. Investors, banking on a market-changing breakthrough, were unimpressed. Meanwhile, Eli Lilly’s treatments strengthened their lead, challenging Novo’s dominance in obesity solutions. The miss was a bitter pill for investors, underscoring the high stakes of the weight-loss race.

2. Lennar ($LEN) – Market Cap: $37.3B (-10.6%)

Lennar’s Q4 earnings missed expectations as rising mortgage rates and affordability concerns squeezed homebuyers. Deliveries fell 7%, while incentives to drive sales dragged margins below forecasts. With housing demand hindered by steep borrowing costs, Lennar faces a bumpy road ahead. Long-term fundamentals remain solid, but in the short term, Lennar’s results show just how challenging the housing market has become.

3. CVS ($CVS) – Market Cap: $55.8B (-10.2%)

Talk about a nasty one-two punch. First, the government took aim at PBMs as Trump renewed his promise to “knock out the middlemen,” threatening CVS’s margins. Then, the DOJ accused the company of fueling the opioid crisis by allegedly prioritizing profit over safety. While CVS has vowed to fight the allegations, investors remain wary of reputational damage and financial fallout, leaving the stock reeling from a tough week.

Lock In Gains Now, Beat Taxes Later 🔒

Last week we covered how to turn your dud investments into tax wins. Now, let’s flip the script: tax-gain harvesting. It’s not as flashy, but it’s just as savvy—especially if you expect a higher tax rate in the future.

How It Works

If your income is lower than usual this year, consider selling some winners to “realize gains.” In doing so, you’ll pay less tax today (or none at all, depending on your bracket).

Why bother? It resets your cost basis higher, reducing future taxes.

Think of it as locking in your low tax rate before Uncle Sam comes knocking for more. And when markets rally, you’ll be glad you started with a clean slate!

Why Harvest Gains?

Tax-gain harvesting creates a tax arbitrage opportunity. Here’s an example:

• Let’s say your 2024 income is $70,000 (married filing jointly). Your long-term capital gains fall in the 0% bracket up to $94,050.

• If you sell $20,000 in gains, you will pay $0 in tax, and raise your cost basis to today’s levels.

• If your 2025 income increases to $100,000, those same gains would be taxed at 15%—costing you $3,000 in taxes!

Result: You just saved $3,000 in future taxes by selling strategically.

How To Execute

1. Spot Your Winners: Find stocks or funds deep in the green.

2. Check Your Bracket: Is your income unusually low this year or expected to rise next year? Perfect timing.

3. Sell Before 12/31: Realize gains at your lower 2024 tax rate.

4. Reinvest Proceeds: Even back into the same investment right away—there’s no wash-sale rule for gains.

5. Lock In Savings: Pay a smaller (or zero) tax bill in April and enjoy a lower tax bite in the future.

Who Should Harvest Gains?

• Investors expecting higher tax brackets next year or beyond.

• Retirees in a low-income phase before required minimum distributions (RMDs) kick in.

• Anyone looking to nip future tax headaches in the bud.

The clock’s ticking! Don’t let the calendar flip without at least considering a gain-harvesting move.

Worth The Read 📚

📜 The House passes a funding bill just hours before a looming shutdown, after two earlier plans collapsed under Trump and Musk’s online attacks. The measure keeps the government open until mid-March.

💳 Hidden ticket fees get banned, finally freeing travelers and concertgoers from those wallet-draining “surprise” add-ons. The FTC’s new rule forces upfront pricing, so no more grumbling at checkout.

💰 CFPB sues major banks over Zelle woes, hitting JPMorgan, Wells Fargo, and BofA for rushing the payment platform to market without fraud protections. With $870M in consumer losses on Zelle, the feds say it’s time banks foot the bill for “defective” design.

🍫 Cocoa prices hit record highs, as weather issues threaten global supply. With tight beans and edgy traders, your chocolate fix might soon come with a hefty price tag.

👩‍⚖️ Biden backs lawmaker trading ban right before heading for the exit, reviving long-running talk of restricting Congress from stock wheeling and dealing. Will the new regime take the baton or drop it entirely?

📉 Mortgage demand stalls after rates drift higher, ending a five-week rally. Even modest rate moves rattle homebuyers and refinancers, showing just how jittery the housing market remains.

😲 Supreme Court agrees to hear TikTok’s challenge that forcing ByteDance to sell or get booted off U.S. app stores might violate free speech rights.

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The Week Ahead 🔍

The slowdown is in full swing! This week’s schedule is thinner than your coworker’s holiday excuses. With no major earnings or blockbuster reports, it’s the perfect time to reflect, recharge, and plan your New Year’s resolutions.

Monday

• No action today—unless you count holiday shopping

Tuesday

• November Durable Goods Orders (est.-0.3% MoM)

• Stock market closes early at 1 p.m. ET

• Bond market closes early at 2 p.m. ET

Wednesday

• Markets closed for Christmas

   

Thursday

• Another quiet day—use it to polish off those Christmas leftovers

Friday

• October Case-Shiller Home Prices (est. -0.2% MoM, 4.4% YoY)

That’s a wrap! See you next Monday with all the market insights and money tips you need to stay ahead.

Keep stacking,
The Money Maniac 💸

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DISCLAIMER: The information provided in this newsletter is for informational purposes only and should not be construed as financial advice or a solicitation to buy or sell any assets. All opinions expressed are those of the author and are subject to change without notice. Please do your own research or consult with a licensed professional before making any investment decisions.