The Investopedia Express with Caleb Silver

The Upcoming Showdown at the Fed, and Making Cents out of Eliminating the Penny

Jan 27, 2025

Delve into the impact of executive actions sparking record stock highs and shifts in market dynamics. Explore the contentious debate around the penny's future, its production costs, and the lessons learned from Canada's previous elimination. As the Federal Reserve prepares to meet, consider the implications of interest rate decisions on the economy. Plus, a look at the rise of nuclear energy stocks driven by AI and how dark pools are changing trading transparency. The financial landscape is evolving, and there's much to discuss!

13:37

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Episode notes

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Quick takeaways

The stock market's record highs were driven by large tech stocks and positive investor sentiment from the new administration's announcements.

The proposal to eliminate the penny aims to save taxpayers millions but faces challenges like inflation and existing circulation issues.

Deep dives

Record Highs and Market Optimism

The stock market reached fresh record highs, primarily driven by large tech stocks amidst positive investor sentiment following a series of announcements from the new administration. The S&P 500 and NASDAQ both saw substantial weekly gains, influenced by a combination of softer tariff rhetoric and buoyant earnings reports from financial stocks. The optimism was partly fueled by an anticipated investment of $500 billion aimed at bolstering the U.S. artificial intelligence sector, which sparked renewed interest in tech companies like NVIDIA and Oracle. This rally was even more notable considering the over-concentration of gains in a select few tech stocks, highlighting the importance of broader market participation.

Intro

4min

The Case for Eliminating the Penny: Economic Implications and Historical Context

4min

Navigating Economic Changes and Monetary Policy Impacts

2min

Navigating the Earnings Surge and the Enigma of Dark Pools

3min

On The Express this week, we dissect the flurry of economic executive orders and announcements from the Trump administration and identify the new power brokers influencing markets and the future of A.I. The Federal Reserve will meet on interest rates for the first time this year and the first time under this administration, which has been demanding lower rates. Plus, DOGE, led by Elon Musk, says it's time to stop printing the Penny, but those cents come with billions of dollars worth of complications even though they cost more to produce than they are actually worth. And, stocks touched record highs again last week, and breadth inside the markets actually improved which could set the stage for the next leg of this bull market.

LINKS FOR SHOW NOTES

https://www.investopedia.com/what-to-expect-from-the-federal-reserve-s-interest-rate-decision-wednesday-8779447

https://www.investopedia.com/nuscale-oklo-and-other-nuclear-stocks-soar-on-anticipation-of-ai-growing-energy-needs-8779389

https://www.investopedia.com/terms/d/dark-pool.asp

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

https://www.investopedia.com/what-to-expect-in-the-markets-this-week-fed-powell-interest-rates-inflation-apple-tesla-microsoft-earnings-8779620

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