Good morning.

While pausing so far this morning, the S&P achieved another intraday record yesterday … continuing its habit of hitting new highs (which happened more than 50 times in 2024).

But the big question is if rate-cut hesitancy on the part of the Fed will drive investors to the sidelines … as most economists, strategists, and people sitting at home streaming shows feel there will be no change announced during the FOMC meeting taking place in less than one week.
Along these lines, the team at Morgan Stanley Research is giving the view that there will be one rate cut in the first part of this year … and then there will be a pause until well into the second half of 2026.

Active home listings are on the increase, according to AEI Housing Center, though this comes at the same time mortgage demand has slowed.  So, if supply is up … and demand is not keeping pace … will home prices actually start to fall?  That might not be crippling … for Redfin reports that homes saw a 4.6% year-over-year price gain … and every one of the top 50 metropolitan areas had prices gains.

I heard the recent “drill, baby, drill” comments … which grew a bit louder over the last few days … but found interesting a note by Gavekal Research as their claim is we already have record highs in oil and gas produced … and an increase in production will not occur unless there is close to a 30% increase in the prices of gas and oil.

My note is a bit shorter than usual this morning.  No, I don’t have some big meetings to attend to, nor do I have mounds of paperwork with a pressing deadline. My note this morning is a little short for one simple reason.

I am lazy.

One other bit of news caught my eye for two reasons.  First of all, when it was proposed it sounded so ridiculous that I thought it was from a satire page. Secondly, it is interesting … as I find everything about elephants to be intriguing.

Per the last article below, there was an attempt to have elephants classified as “human” … which would have allowed them to “sue” in order to gain their freedom from a Colorado zoo.

While the news will be met with a great deal of elephant sadness once word gets around, the elephants did hire an elephant lawyer to defend them … and it didn’t cost a great deal

… as he agreed to work for peanuts.

Have a great day,

Joseph G. Witthohn, CFA

Have any questions? Please contact info@teamemerald.com