Why Louis expects a rate cut tomorrow… Luke explains how shifting consumer sentiment could be very bullish… are we in for a year-end rally… Bitcoin is strengthening – but this key level is critical to watch
As I write Tuesday at lunch, Wall Street traders put 90% odds on a quarter-point rate cut from the Federal Reserve at tomorrow’s FOMC meeting.
According to legendary investor Louis Navellier, editor of Breakthrough Stocks, there are three reasons why this cut is warranted:
- Labor market weakness: The ADP private payrolls report last week showed a loss of 32,000 jobs in November.
- Real estate deflation: Softening home and rental prices across the U.S. are making deflation “a very real problem.” Combined with deflation imported from China, Louis concludes there’s a greater risk of deflation than inflation today.
- Abysmally low consumer confidence: The Conference Board’s consumer confidence index dropped to 88.7 in November, from 95.5 in October – the largest decline in seven months.
Now, let’s pause on this last point about sentiment.
There’s another angle worth noting – one that could be bullish for stocks…
Did last Friday’s University of Michigan Consumer Sentiment survey mark a bottom – and a launchpad for stocks?
Louis’ point about collapsing confidence is critical – historically, steep drops like this reflect real economic stress.
But did the new data out last Friday mark an inflection point? One with big implications for Wall Street?
Luke Lango – our technology expert and the editor of Innovation Investor – points out that last Friday’s University of Michigan Consumer Sentiment survey ticked higher in December for the first time since June. He notes that “consumers are feeling slightly less miserable than before.”
Now, as with Louis’ analysis, Luke isn’t sugarcoating anything: sentiment is still weak. But it’s where that weakness sits on the historical scale that matters – especially with last Friday’s new sentiment data showing green shoots.
In past cycles, this basement level has often marked the spot where markets begin building their next major advance.
Back to Luke:
To be clear: sentiment is still washed, rinsed, and air-dried on the low setting.
But it’s firmly in that historical 50–60 “bottoming zone” that tends to precede major rallies.
Think late 1980… late 2008 / early 2009… late 2011… late 2022.
This is the part of the movie where the soundtrack quietly shifts from “despair” to “maybe things are turning.”
The University of Michigan report included other good news. Luke notes that consumer inflation expectations just posted their most significant drop since July, slipping from 4.5% to 4.1%.
Put it all together, and he expects tomorrow will bring a rate cut, which will support the market:
In our view, inflation is simply stuck in the upper-2% range and is unlikely to meaningfully accelerate or collapse from here.
And in that environment, the Fed can — and should — continue cutting rates.
Rate cuts plus stable inflation equals rocket fuel for risk assets.
So, are we in for a year-end rally?
That’s what Louis expects.
Though December’s performance has been fairly muted so far, the investment legend says this is normal – investors typically prepare for year-end through tax-loss selling. But as Christmas gets closer, the market firms up.
Here’s Louis:
Historically, the second half of December has been the second strongest time of the year for stocks since 1928.
Stocks tend to produce average gains of 1% during this time, with gains 70% of the time…
In fact, I wouldn’t be surprised if Santa Claus visits Wall Street a little early this year – potentially as early as [this] week, kicking off what should be a strong year-end rally.
Now, one heads-up…
Though Louis expects a rate cut, he says we shouldn’t bank on anything too dovish looking forward:
I am not expecting that dovish of an FOMC statement because a lot of the FOMC members seem to be annoyed they don’t have the normal data they need to work with. So, they just are going to be stubborn…
The guidance is going to be sloppy; we’ll see what the dot plot is.
Still, Louis believes that the cut will take the market higher into year-end.
We’ll report back tomorrow.
If you’re interested in the exact way that Louis and Luke are positioning themselves for a year-end rally and beyond…
Then I recommend yesterday’s round-table discussion with Louis, Luke, and our macro investing expert Eric Fry.
Each year, these three experts come together to discuss the most influential trends impacting the markets, the macro factors likely to serve as headwinds and tailwinds over the coming months, and which stocks are best positioned to generate wealth given these conditions – the “Power Portfolio.”
Here’s our Power Portfolio team with how this portfolio has performed in 2024 and this year:
Power Portfolio members have done spectacularly over the past two years. Our 32% gains in 2025 followed a 35% profit from 2024.
On average, the 12 companies in our 2025 cohort saw revenues rise 23% and net profits surge 148%. And we beat the big indexes by a mile:
- Power Portfolio 2025: 31.6%
- Nasdaq Composite: 18.5%
- S&P 500: 14.3%
- Dow Jones Industrial Average: 10.6%
We believe 2026 will bring even more opportunities, provided you know where to look.
So, where are they looking?
That’s what Monday’s discussion was all about. But as we’ve been tracking here in the Digest, AI infrastructure is a big theme.
Back to our experts:
Tech companies are pouring billions of dollars into artificial intelligence infrastructure, and the U.S. government itself could soon unleash trillions to support critical industries.
Our stock picks reflect the sentiment. And given our rigorous vetting process, we’re confident that these picks will outperform the market for the coming year by a long shot.
We still have a free replay available right here. It provides far greater detail on why Louis, Eric, and Luke are so confident in this year’s picks.
Switching gears to Bitcoin – it’s looking stronger after last week’s selloff
Why?
To answer that accurately, let’s first address why the grandaddy crypto sold off so sharply to begin with.
Here’s Luke, from his weekend crypto update in Innovation Investor:
Bitcoin crashed not because the fundamentals broke – but because leverage did.
Too many traders took on too much risk, too close to the highs, with too little margin.
When the market buckled, the liquidations cascaded, the forced selling accelerated, and suddenly, every chart on Crypto Twitter looked like a ski slope.
But eventually, the over-levered positions are erased, the weak hands get shaken out, and the market stops bleeding simply because there’s nobody left to sell at gunpoint.
That’s precisely what happened this week.
Luke goes on to explain that once all those leverage-based forced liquidations dried up, real price discovery was free to resume. And that meant buyers stepped back in.
Now, simplistically, bulls are returning because Bitcoin’s fundamental tailwinds haven’t changed.
Against a backdrop of global debt and rampant fiat debasement, Luke writes that:
- Washington is actively embracing stablecoins, trying to modernize the U.S. financial infrastructure.
- Tokenization continues to expand and will eventually become a multi-trillion-dollar category.
- The largest U.S. banks and brokerages are building out the infrastructure for the new global financial system with tokenized stocks, options, crypto, T-bills, and funds… to achieve 24/7 fractional global trading across all avenues.
These are enormous tailwinds for continued crypto adoption.
But a “massive downturn” is still a risk
Luke put a key Bitcoin level on our radar a few weeks ago: the 50-week moving average.
This is a historically decisive line in the sand. When Bitcoin loses the 50-week moving average (which happened last month), it always makes a run back up to it. And Luke says that what happens next could make or break the crypto rally:
If we get rejected at the 50-week – like we did in July 2018 and March 2022 – that’ll be a very bearish signal for Bitcoin.
Those were bear-market rejections. Hard stops. Pivot points that preceded massive downturns.
But if we jump above the 50-week and sail higher – like we did in May 2020 – that’ll be a very bullish signal for Bitcoin.
That moment kicked off the most explosive bull market since 2017.
The good news is that Luke says today’s market looks much more like 2020 than 2018 or 2022.
For a few parallels, he points toward improving liquidity, strengthening fundamentals, the return of institutional flows, and accelerating structural adoption.
Where Bitcoin goes next year
Luke didn’t just give subscribers a vaguely bullish projection for 2026. He detailed exactly how Bitcoin goes from here to “mainstream financial infrastructure.”
Here are highlights:
December 2025: Bitcoin runs to the 50-week moving average near $100,000. Seasonality is strong. Sentiment is turning. Macro tailwinds are building.
January 2026: Bitcoin fights with that $100K level – maybe chops around it, maybe dips slightly below it. Volatility increases, but the structural drivers overpower the noise.
February–March 2026: Bitcoin breaks above the 50-week decisively. This triggers trend-following flows, momentum algos, ETF inflows, RIA allocation creep, institutional FOMO, etc. And the boom cycle resumes.
Full-year 2026: Crypto stops trading like a meme and starts trading like a structural growth sector, powered by: U.S. stablecoin adoption, tokenization at national banking scale, regulated spot market expansion, broader brokerage integrations, retail reactivation, and the strongest macro liquidity backdrop since 2020.
To get the latest on Luke’s crypto analysis, click here to learn about joining him in Innovation Investor.
Let’s end today by coming full circle to tomorrow’s potential rate cut and more cuts in 2026…
Just as it could goose stock prices and launch a year-end rally, Luke believes it could light a fire under the crypto sector.
I’ll let him explain as he takes us out today:
Over the last two weeks, Fed members didn’t exactly hide the ball. They acknowledged slowing labor momentum and softened their tone about restrictive policy… all but admitting that rate cuts are on the table for early 2026.
And markets did what markets do; they front-ran it.
Rate cut odds spiked. Bond yields fell. Risk appetite returned. And Bitcoin – which behaves like a high-octane macro bet when liquidity expectations shift – ripped higher.
When the macro picture flips from headwind to tailwind, crypto responds violently.
This is the same dynamic we saw after both the 2015 tightening cycle and in March 2020 – the same we see anytime the Fed pivots from tightening to easing.
2026 looks poised for a liquidity renaissance; and crypto can smell it.
Have a good evening,
Jeff Remsburg
