Although US indices started December on a sell-off note, they closed well above their intraday lows on Monday. The S&P 500 closed 0.5% lower on Monday, but the energy, technology, and non-essential consumer sectors remained positive. In short, sales weren't strong; I'd say it was more of a "new month of caution."
The ISM manufacturing data was below expectations: 48.2, compared to 49. The weakness in new orders is particularly striking. The manufacturing sector is currently at a four-month low and hasn't broken out of contraction throughout 2025 (excluding January and February). There are no strong signs of growth yet.
December is a seasonally strong month. While the indices started weakly, December has historically been generally positive, driven by fund inflows, balance sheet closings, and expectations of a Christmas rally.
The strategic partnership between Nvidia and Synopsys (SNPS), announced on Monday, generated significant buying in SNPS. The stock closed the day up 4.85%, the strongest performer on the S&P 500. This move is part of Nvidia's strategy to expand its AI-powered engineering and design solutions.
Two key steps for OpenAI:
- Investment in Thrive Holdings
- Agreement with Accenture for enterprise AI services
Competition is growing in the AI ecosystem: The OpenAI + Nvidia alliance is growing stronger, while the Google ecosystem is on the other side. It seems we will see much fiercer competition next year.
The rise in silver continues. The gold/silver ratio was close to 72 on Monday and was around 73.7 yesterday. As the ratio rises, silver's relative cheapness increases. Momentum in silver is positive.
Since mid-July, MSTR has retreated 65%, while Bitcoin has fallen by approximately 30% during the same period. Leverage is fantastic when it works, but its impact is doubled when it doesn't. If you're thinking, "Bitcoin will rebound from here," then in theory, MSTR's return could exceed BTC's. But the risk is equally high.
Morgan Stanley raised its Nvidia target price. 12-month target price: $235 → $250.
They believe the AI cycle will continue strong until 2026.
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