Why We're Buying Mastercard ($MA) Now
Book Club Review: Nexus by Yuval Noah Harari
Our latest book club pick, Nexus: A Brief History of Information Networks from Stone Age to AI, left us with plenty to chew on. For those of us who devoured Harari’s Sapiens, the anticipation was palpable. While Nexus didn’t quite hit the same, it still sparked some fiery discussions.
The good: Harari’s historical analysis of how information shapes power structures is as sharp as ever. His contrast between democratic and totalitarian governments through the lens of information control had us all scribbling notes. The book’s exploration of AI’s potential to disrupt these dynamics? Absolutely timely and thought-provoking.
The not-so-good: At times, Nexus felt like a firehose of ideas—some fascinating, some feeling a bit rushed. Harari jumps between topics so quickly that evidence sometimes feels like an afterthought. A few of us bristled at conclusions drawn without much backing, but that’s what makes for a lively debate, right?
Even with its flaws, Nexus kept everyone on the edge of their seats. Harari’s questions about AI, control, and the future of governance are the kind that linger long after the book ends. If you’re up for a brain-twister of a read that’ll leave you arguing with friends, Nexus is a solid choice.
For our book club, it was a win—even if we didn’t always agree with Harari’s take. The real win was the conversation it sparked.
That “firehose of ideas” feeling is also a pretty good snapshot of markets right now. We’re flooded with headlines, hot takes, and AI-driven narratives that can move entire sectors before the evidence fully catches up. The lesson from our book club debate is simple: when information comes fast, conviction should come slower.
So my filter this week is the same one we used around the table: What’s the claim—and what’s the proof? In markets, that means giving more weight to price action, earnings quality, guidance, and the direction of rates than to whatever story is trending on social media. If the facts don’t confirm the narrative, keep position sizes smaller, stay disciplined with entries, and don’t let FOMO turn a “maybe” into a full-sized bet.
And on the flip side: when the evidence does line up—strong fundamentals, improving sentiment, and clean technicals—you don’t need to predict every twist in the information cycle. You just need a repeatable process, clear risk management, and the patience to let the signal outlast the noise.
Recent Trade Review: $JPM (JPMorgan Chase & Co.)
One of the cleaner opportunities we covered recently was $JPM (JPMorgan Chase & Co.), flagged as a long setup by our DPT Services model. The key here wasn’t chasing a headline—it was letting the model do what it’s designed to do: identify when probability, trend structure, and timing start to align in a way that creates a tradable edge.
We walked through the full $JPM setup live inside the Live Trading Room, including how the DPT model surfaced the opportunity and how we think about execution and risk control in real time. If you want to see the exact sequencing and context, you can watch last Tuesday’s recording (Tuesday, December 30, 2025) at the link below.
What’s also worth highlighting—because it’s practical—is the biggest difference between the free vs. paid experience: paid members receive SMS messages for timely entries and exits. In fast-moving markets, even a strong setup can get wasted if you’re late to the decision. Those SMS alerts are built to reduce the “I’ll check later” problem and help members act while the edge is still there.
Live Trading Room Recordings (includes last Tuesday)
Current Trading Landscape
Last week ended with the market still leaning into a familiar late-December playbook: a risk-on rebound in technology and AI-linked names helped keep the major indexes buoyant, seasonal “Santa Claus rally” expectations supported sentiment, and precious metals pushed to fresh records as investors balanced optimism with hedging behavior. The S&P 500 gained about 1.4% last week, and even with plenty of intraday chop, the broader message was that buyers were still willing to step in—especially when AI and semiconductors showed strength.
This week, though, has felt more like a year-end cooldown than a clean continuation. U.S. markets opened the week slightly lower, with the S&P 500 down about 0.3%, the Dow off roughly 0.5%, and the Nasdaq down around 0.5%. That early dip wasn’t a major breakdown so much as a reminder that after a powerful year—roughly +17% for the S&P 500, +14% for the Dow, and more than +40% for the Nasdaq—markets don’t need much of a catalyst to pause, rotate, and take profits. With no earnings driving fresh fundamental repricing this week, price action was shaped more by positioning, liquidity, and leadership than by new corporate surprises.
The most dramatic “positioning snapback” showed up in metals. After silver printed record territory above $80 and gold ran to its own highs, both saw sharp reversals—silver fell as much as 7% and gold dropped more than 3% at one point. That kind of move is less about a sudden change in long-term conviction and more about what happens when a crowded trade meets holiday-thin liquidity: the exit door feels smaller than expected. Commodities more broadly carried that same message—strong themes can remain intact, but the path gets bumpier when the calendar thins out.
Tech, meanwhile, started the week on the back foot as heavyweight names like Nvidia and Tesla slipped more than 1.2% and dragged on the broader complex. There was also some classic year-end housekeeping, with analysts trimming price targets on parts of consumer staples as portfolios got cleaned up for a new calendar year. Underneath that, sentiment stayed constructive but cooled slightly; the Fear & Greed gauge remained in “Greed,” yet felt less exuberant than last week, which matches a tape that’s consolidating rather than accelerating. Importantly, the “calm” at the surface has remained deceptive: the VIX has been pinned around 14 while indexes sit near all-time highs, but holiday-thin trading has still amplified sector swings and made leadership concentration more obvious.
Macro has been part of that balancing act. Growth data still looks firm, with Q3 GDP reported at 4.3%, but consumer confidence dropped to 89.1, reflecting more anxiety around jobs and income. That split—strong backward-looking growth, softer forward-looking confidence—helps explain why the market can hold up near highs while still feeling fragile intraday. Rates add another layer: the 10-year yield has been volatile in a wide range between roughly 3.6% and 4.2%, reinforcing the “higher for longer” risk that can quietly compress multiples even when the index doesn’t look stressed. In that context, it makes sense that momentum has deteriorated even as prices remain elevated.
On Friday, the market captured the push-pull tendency perfectly as it tried to reset after a rough stretch into the new year. The major indexes entered 2026 coming off a four-day losing streak, and while the day began with gains, the early strength faded into sideways trading. Software weakness weighed on the S&P 500 and Nasdaq, but the market leaned on an old support beam: the AI trade. Semiconductors led the way, with chip exposure acting as the stabilizer even when the rest of tech looked uneven. What stood out most was the internal picture: breadth was solid, with hundreds of S&P 500 stocks tracking higher even as the index struggled to extend the bounce—an important signal that this has been more rotation and digestion than outright risk-off behavior.
Single-stock news added texture without changing the bigger narrative. Tesla’s fourth-quarter deliveries came in at 418,227 versus a consensus closer to 422,850, a “not disastrous, not inspiring” result that fits the week’s theme of selective enthusiasm. Rivian’s production and deliveries landed broadly in line with its own expectations. Chinese EV makers showed mixed but generally strong unit trends in December, which kept that pocket active without becoming a true market driver.
Outside equities, oil stayed subdued around three-month averages after a steep 2025 decline, with Brent near $60 and WTI near $57. The backdrop remains conflicted: supply gluts and a weak prior year keep a lid on prices, but geopolitical tensions tied to Saudi-UAE dynamics and proxy conflict add a risk premium that can reappear quickly. That matters because one of the underappreciated risks for 2026 is reflation—if delayed hiring and investment decisions snap back and global demand firms, demand could outpace supply in pockets of the economy and keep inflation pressures stickier than the market expects.
Globally, risk appetite hasn’t disappeared; it’s just been expressed differently. India has continued to set records, with the Sensex and Nifty reaching new all-time highs led by metals and PSU stocks. Asian markets have traded mixed, influenced by shifting expectations around U.S. rate cuts and the ongoing easing in U.S.–China tensions after Nvidia resumed China chip shipments. And hovering over the entire tape is the next chapter of the AI buildout: the market is already looking ahead to 2026 hardware roadmaps, from Nvidia’s planned Vera Rubin cycle to AMD’s rack-scale push and the continued growth of custom AI silicon work.
Taken together, the current landscape looks like a normal consolidation after a huge year rather than the start of a new bear phase. Sentiment is still positive but more cautious, volatility is selectively elevated because liquidity is thin, and leadership remains the deciding factor—particularly anything tied to AI and semiconductors. That’s why I’m staying in a market-neutral camp here: momentum has deteriorated, the main risk remains rates staying higher for longer while unemployment ticks up, and yet the longer-term trend still appears intact. In that framework, I still see the SPY capable of reaching the 700–720 area if leadership holds and rates cooperate, while 650–660 remains the key support zone I want respected over the next few months as this consolidation plays out.
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Sector Spotlight
The market may be grinding sideways, but the message underneath the tape has been surprisingly consistent: investors are still willing to pay for growth that feels real, not just theoretical. That’s why this week’s action—low VIX near 14, indexes hovering close to highs, and leadership rotating in narrow bursts—matters more than the headline closes. When volatility is muted but intraday swings are sharp, it’s usually a sign that psychology is doing the heavy lifting. Traders aren’t panicking; they’re choosing. They’re trimming what feels crowded, leaning away from pure “defensive” comfort, and selectively rotating toward areas that benefit when the economy keeps its footing.
You could see that rotation in the cross-currents. Precious metals, after an outsized run, snapped back hard—classic profit-taking in a crowded hedge when liquidity is thin. Tech wobbled early, weighed down by mega-cap softness, yet the AI/semiconductor complex still acted like the market’s stabilizer. And while sentiment cooled slightly, it never broke—Fear & Greed stayed in “Greed,” just less exuberant than last week. At the same time, the macro picture stayed mixed in a very market-friendly way: Q3 GDP remained strong at 4.3% while consumer confidence slid to 89.1. That tension matters because it creates exactly the kind of environment where investors look for a simple question to answer: Is the consumer still spending?
When that question stays even “mostly yes,” money tends to flow toward the parts of the market that translate spending into earnings leverage. It’s also where the psychological shift is most interesting. Confidence surveys can wobble while spending holds up—especially after a strong year in equities, when the wealth effect, employment income, and habit-driven consumption can keep demand resilient even if people say they’re worried. This is the subtle difference between sentiment and behavior, and markets trade behavior.
That’s why the sector gaining traction here is the one most closely tied to risk-on posture and consumer resilience: Consumer Discretionary, with XLY (Consumer Discretionary Select Sector SPDR Fund) as the clean vehicle. In a tape where investors are rotating rather than retreating, XLY becomes a proxy for “the consumer is bending, not breaking”—and for the market’s willingness to bet that spending power remains sturdier than the surveys suggest.
Trade of the Week: MA (Mastercard)
If this week has been about selective confidence—buyers showing up, but only when the story is supported by real demand—then Mastercard (MA) fits the moment almost too well. In a market consolidating near highs with leadership rotating and rates swinging in a wide range, the cleanest trade ideas are the ones that don’t require heroic assumptions. Mastercard doesn’t need a perfect macro backdrop to work. It benefits from something far more durable: transactions continuing to happen, spending continuing to flow, and the long-term shift toward digital payments continuing to compound.
Here’s the bridge from the Current Trading Landscape: we just watched investors cool off crowded hedges (metals), question parts of mega-cap tech, and still keep overall risk appetite intact. That’s the profile of a market that wants exposure to growth, but with less narrative fragility. MA sits in that sweet spot. It’s a high-quality compounder tied to consumer behavior—exactly what investors start to prize when the tape gets choppy but doesn’t turn bearish. If the market is asking “is the consumer still spending?” Mastercard is one of the most direct ways to express a “yes” without having to pick a single retailer, automaker, or brand winner.
This week’s macro mix reinforces the case. Strong GDP signals the engine is still running, even if confidence readings are softer. That kind of environment often creates a psychological lag: people feel cautious, but they keep spending, traveling, and transacting—especially when financial conditions haven’t meaningfully tightened overnight. Meanwhile, with no major earnings catalysts this week, price action has been driven by positioning and flows, and that tends to favor names that institutions are comfortable holding through noise. MA is exactly that type of “core growth” holding: global footprint, diversified exposure to everyday purchases and travel, and a business model that can capture volume without needing to take credit risk.
I’m adding MA because it pairs perfectly with the sector theme. If XLY represents a bet on spending resilience and risk-on rotation, Mastercard is the “toll booth” on that behavior. The strong takeaway is psychological: when markets are calm on the surface but unsettled underneath, the best opportunities often come from investing in how people actually behave, not how they say they feel—and right now, behavior still points to a consumer that’s cautious in sentiment, but steady in action.
This week, I’ll add Mastercard (MA) to my portfolio!
And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 82.53% of all trades that I made, with an average profit of 39.32% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice, where our numbers and results speak for themselves.
As we move into the end of 2025, now is the perfect time to reassess your trading strategy and take your portfolio to the next level for the upcoming year! Visit our website at www.yellowtunnel.com to explore our range of services and select one as your default trading system. With the power of our AI-driven platform, YellowTunnel is designed to help you navigate the complexities of the market, refine your strategy, and drive profitability in 2025.
Whether you’re focused on real-time trade opportunities, advanced analysis, or developing a disciplined trading mindset, we’ve got the tools and insights to guide you. As the year unfolds, let's work together to make 2025 the most profitable year for your portfolio. But remember—successful investing starts with informed decisions. Always conduct thorough research and assess your risk tolerance before executing any trades.
Let’s make this year a transformative one for your financial growth!
One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating, and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:
Wishing you a week filled with resilience, growth, and prosperous opportunities!