Holiday Trading, Inflation Data and Other Key Things to Watch this Week

Group 1: Economic Indicators and Market Dynamics - The Core PCE Price Index will be released on Monday, serving as a key inflation measure for the Federal Reserve, with potential implications for monetary policy heading into 2026 [1] - The Q3 GDP revision and consumer confidence report on Tuesday will provide insights into economic growth and household sentiment, crucial for assessing consumer spending sustainability [2] - Durable goods orders on Wednesday will offer insights into business investment intentions and manufacturing demand, while initial jobless claims will provide a snapshot of the labor market [4] Group 2: Holiday Trading Environment - The holiday week trading dynamics will see reduced liquidity, which can amplify price movements and create challenges for meaningful price discovery [3] - Historical patterns suggest that holiday weeks often experience reduced volatility and range-bound trading, although unexpected news can lead to significant market moves [3] - The light volume environment may result in choppy trading, with potential for sharp intraday moves that quickly reverse as liquidity returns [3] Group 3: Year-End Market Reflection - The Christmas week offers an opportunity for investors to reflect on 2025's market performance and set frameworks for 2026 positioning, with key themes including AI investment and Fed policy shifts [6] - Technology stocks, particularly those related to AI, have driven market gains, but recent earnings reports have raised sustainability questions [6] - Key questions for investors include the sustainability of AI capital expenditures, inflation moderation, and consumer spending resilience amid economic uncertainties [6]