Good Afternoon. Wall Street ended the week juggling three moods at once: anxiety over AI spending, optimism powered by rate cuts, and a sudden case of regulatory déjà vu in cannabis stocks. Chips stumbled, weed flew, and Taiwan calmly reminded everyone who actually runs the semiconductor world. Let’s get into it.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Broadcom Slide Drags Nasdaq Lower as AI Doubts Resurface

The News: U.S. stocks fell Friday, led by a sharp selloff in tech after Broadcom shares dropped more than 10% on renewed concerns about AI demand and profitability. Broadcom’s earnings raised questions around sales forecasts, backlog visibility, and future margins following a similar shock from Oracle a day earlier. For the week, the Dow stayed positive thanks to Wednesday’s Fed rate cut, while the Nasdaq and S&P 500 finished lower.

Why It Matters: The market is starting to stress-test the AI boom, not on hype, but on math. After months of relentless spending, investors are scrutinizing whether massive capex and long-dated contracts will translate into margins and cash flow. Broadcom’s stumble reinforces a growing divide: rate-sensitive and industrial stocks are holding up, while AI-linked tech faces valuation fatigue. Gold hovering near $4,300 and a firmer 10-year yield around 4.19% underscore the crosscurrents. Easing policy on one hand, growth skepticism on the other.

What to Watch: Follow-through in AI hardware names, guidance revisions across the chip complex, and whether money keeps rotating out of tech into defensives and cyclicals. If Oracle cracked the door, Broadcom just pushed it wider and the Nasdaq is feeling the cold winter wind.
Source: wsj.com

2. Economist Warns Recession Risks Are Rising for 2026

The News: Economist Joel Naroff says a U.S. recession in 2026 is becoming increasingly likely as multiple policy and economic pressures converge. He points to stubbornly high inflation, uncertain tariff policy, slower population and labor-force growth due to immigration restrictions, and a Federal Reserve constrained in how aggressively it can cut rates. Naroff also flags artificial intelligence as a potential near-term drag, with hiring pauses and possible layoffs emerging before productivity gains materialize. Add in rising geopolitical and trade tensions, and the outlook darkens.

Why It Matters: This is less about one shock and more about accumulation. Tariffs risk keeping prices elevated, squeezing consumer confidence that’s already near cycle lows. Immigration limits constrain labor supply, pushing up costs while capping growth. The Fed faces a lose-lose tradeoff between fighting inflation and supporting demand. Meanwhile, AI, often pitched as a growth savior, could first slow hiring and spending in 2026 before benefits arrive later. Naroff’s warning underscores a fragile balance: the economy remains resilient, but policy missteps or external shocks could tip it into contraction.

What to Watch: Tariff decisions heading into 2026, signs of AI-driven layoffs by midyear, consumer confidence among middle-income households, and how boldly the Fed moves if growth softens. The risk isn’t one bad break, it’s several manageable problems deciding to show up at the same time. Sound familiar?
Source: inquirer.com

3. YouTube TV on Track to Become America’s Largest Pay-TV Provider by 2027

The News: YouTube TV is on track to overtake Charter and Comcast to become the largest U.S. pay-TV operator by 2027, according to new forecasts from Omdia. Subscriber counts are projected to reach 10.4 million by 2027, surpassing Charter’s 10.0 million and Comcast’s 9.2 million. As of the end of 2025, YouTube TV already ranks third with 9.3 million subscribers, behind Charter (11.4 million) and Comcast (10.6 million). If the forecast holds, it would mark the first time a virtual pay-TV provider tops the U.S. market.

Why It Matters: This is a structural shift in how Americans pay for television. YouTube TV’s rise shows that “cord-cutting” didn’t kill pay TV, it digitized it. By bundling live channels, premium networks, and marquee sports like NFL Sunday Ticket, YouTube TV has recreated cable for the streaming era, without the cable box. For legacy operators like Comcast and Charter, the threat actually isn’t Netflix, it’s Google. And for the industry, the takeaway is clear: scale, live sports, and hybrid models now matter more than pure streaming subscriber counts.

What to Watch: Pricing pressure as YouTube TV grows, sports-rights renewals (especially the NFL), and whether legacy cable firms respond with deeper bundling or spin-offs. The next phase of the TV wars isn’t streaming vs. cable, it’s platform vs. platform with Google positioned to succeed.
Source: finance.yahoo.com

4. Pot Stocks Pop as Trump Signals Possible Easing of Federal Cannabis Rules

The News: Cannabis stocks surged Friday after reports that President Trump is considering easing federal restrictions on marijuana, potentially reclassifying it closer to standard prescription drugs. Tilray jumped 39%, Canopy Growth gained 31%, Aurora Cannabis rose 24%, and Cronos climbed 19% as traders piled into the sector. The rally was fueled by a reported call between Trump and House Speaker Mike Johnson, plus a separate proposal that could allow at-home cannabis cultivation in Florida. Regulatory details remain speculative, but momentum was unmistakable.

Why It Matters: For a long-beleaguered industry, regulatory signals matter more than earnings and even hints of federal easing can ignite outsized moves. Reclassification could lower compliance costs, unlock banking access, and expand interstate commerce, materially improving margins and capital access. The irony isn’t lost on markets: Republicans have historically opposed cannabis reform, making Trump’s apparent openness a sharp narrative shift. For investors, the surge also revives familiar risks, meme-stock dynamics, thin fundamentals, and policy whiplash, that have burned cannabis bulls before.

What to Watch: Whether the White House follows talk with formal rulemaking, how quickly Congress weighs in, and how long retail enthusiasm can outrun legislative reality. Pot stocks are flying again but just remember how often these rallies have gone up in smoke.
Source: businessinsider.com

5. Bank of America Breaks Above Pre-2008 Peak, Capping an 18-Year Comeback

The News: Bank of America shares climbed above $55.08 on Friday, surpassing their pre–financial crisis high for the first time since 2007 and marking an 18-year recovery for the lender. The stock is up about 25% in 2025, putting it among the top-performing major U.S. banks this year. CEO Brian Moynihan recently said markets revenue should rise high-single digits to 10% in Q4, with consumer spending steady and credit quality holding up. The bank also plans to step up share buybacks.

Why It Matters: This milestone is as psychological as it is financial. Bank of America was one of the hardest-hit institutions in 2008, requiring a $45 billion bailout after mortgage losses and the ill-timed Countrywide acquisition. Nearly two decades later, higher interest income, disciplined cost control, and a steadier consumer base have rebuilt investor confidence. With a raised return-on-equity target of 16%–18% and projected double-digit EPS growth, BofA’s comeback reflects how far the U.S. banking system has moved from crisis mode, even as new risks lurk in rates, credit, and regulation.

What to Watch: Follow net interest income as rates evolve, the pace of buybacks, and whether credit quality stays intact if growth slows in 2026. Breaking the old high is symbolic, staying there will depend on how banks handle the next cycle, not the last one.
Source: wsj.com

1. Japan Stocks Hit Record Highs as Investors Look Past BOJ Rate Hike

The News: Japanese equities surged to fresh records Friday, with the Nikkei 225 jumping 1.4% to close above 50,800 and the broader Topix rising 2% to an all-time high. The rally marked the Nikkei’s third straight weekly gain, fueled by Wall Street’s record closes following the Fed’s quarter-point rate cut. Gains were broad-based, led by miners and industrials, though tech stocks lagged after Oracle’s U.S. earnings reignited concerns over AI spending. Attention now turns to the Bank of Japan’s Dec. 18–19 meeting, where a rate hike to 0.75% is widely expected.

Why It Matters: Japan’s market is climbing even as tighter monetary policy looms, a sign investors see the BOJ’s long-awaited normalization as confirmation of economic strength, not a threat. A move to 0.75% would mark Japan’s highest policy rate in 30 years, underscoring how far the country has come from its ultra-loose era. For global investors, Japan offers a rare mix: improving corporate governance, inflation that’s finally sticking, and equity momentum just as the yen remains weak. The hesitation in tech shares also mirrors a global reappraisal of AI costs versus returns.

What to Watch: The BOJ’s messaging next week, any reaction in the yen, and whether the Nikkei can convincingly break above 51,000. Japan’s bull market is alive but it’s about to meet its toughest central-bank test yet.
Source: tradingview.com

2. Russia’s Oil Revenues Poised to Halve in December

The News: Russia’s state oil and gas revenue is projected to fall nearly 50% year-over-year in December to about 410 billion rubles ($5.2 billion), the lowest monthly haul since August 2020, according to Reuters calculations. The drop reflects a double squeeze from weaker crude prices and a stronger ruble: Urals crude averaged $44.87 a barrel in November, about $20 less than a year ago, while the ruble is up nearly 24% over the past 12 months. U.S. sanctions on Rosneft and Lukoil have also hit exports, which fell to 6.9 million barrels per day in November, the lowest since the Ukraine invasion.

Why It Matters: Oil and gas make up roughly a quarter of Russia’s federal budget, so a sharp revenue shortfall lands hard as defense spending swells to 13.5 trillion rubles, or 32.5% of total spending. For all of 2025, energy revenue is now expected to undershoot government targets, weakening Moscow’s fiscal cushion just as sanctions pressure intensifies and buyers demand steeper discounts. The widening Urals discount to Brent, 23% in November, shows how sanctions are reshaping Russia’s export economics and limiting its pricing power.

What to Watch: The Finance Ministry’s official December numbers on Jan. 14, any further export declines to India and China, and whether oil prices offer relief. If not, the Kremlin may have to start funding a wartime budget with a peacetime revenue stream, never a great look, and rarely a sustainable one. Perhaps this is what gets a peace deal done.
Source: reuters.com

3. Taiwan Draws a Line on Advanced Chips, Keeps Crown Jewels at Home

The News: Taiwan plans to keep producing its most advanced semiconductors domestically, rejecting calls to fully replicate cutting-edge chipmaking abroad, Deputy Foreign Minister Francois Wu said Wednesday. While TSMC has invested heavily in fabs in the U.S., Japan, and Germany, including a fresh $100 billion U.S. pledge, Wu said the most advanced technology will remain in Taiwan. Replicating TSMC’s manufacturing success elsewhere is difficult, he argued, citing Taiwan’s “very special culture” and constraints around land, water, and energy. Taipei also rejected a proposed 50–50 chip production split floated by U.S. officials.

Why It Matters: This is the “silicon shield” strategy in plain language. Taiwan makes nearly all of the world’s most advanced chips, the kind that power AI data centers, smartphones, and defense systems, and keeping that capability at home reinforces its geopolitical leverage. For the U.S. and Europe, diversification reduces risk, but Taiwan is signaling there are limits: the crown jewels aren’t for export. The stance also raises the stakes around Taiwan’s security, as global supply chains, and trillions in economic value, remain tightly tethered to stability in the Taiwan Strait.

What to Watch: How far TSMC’s overseas fabs move up the technology ladder, whether Washington pushes harder on localization via tariffs or incentives, and how Beijing responds to Taiwan doubling down on its chip dominance. Taiwan’s message is clear: fabs can travel, leadership stays put.
Source: taipeitimes.com

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