Core Insights - Delayed data on the job market and inflation has created uncertainty regarding the current state of the U.S. economy [1] Group 1 - The lack of timely information on employment figures and inflation rates complicates the assessment of economic conditions [1] - Investors and analysts are left without clear indicators to gauge economic performance, leading to potential volatility in market reactions [1]

Market Overview - Major indexes experienced a significant surge, with the Nasdaq leading due to a 7% increase in Oracle's stock, revitalizing interest in AI investments after a challenging period [4] - Nvidia's stock rose over 3% following reports that the Trump administration may allow the sale of advanced AI chips to China, although high valuations are causing concerns about market volatility into 2026 [5] - By the end of the week, the S&P 500 returned to flat, the Nasdaq achieved a modest gain, and the "Mag 7" stocks outperformed the remaining S&P 493, indicating a resurgence in AI-related stocks [6] Commodity Performance - Gold and silver reached record closing prices, with gold exceeding $4,350 and silver surpassing $67, while copper approached previous highs [6] - The overall market environment is characterized by easing bond yields and fluctuating Bitcoin prices, which ended slightly lower [6] Economic Indicators - Current economic data suggests a favorable environment with manageable inflation and enough economic softness to keep the Federal Reserve engaged, leading traders to anticipate interest rate cuts in March and June 2026 [5] - Fiscal stimulus is beginning to take effect, monetary policy is becoming more accommodative, and political uncertainties are diminishing, contributing to a positive outlook for year-end market performance [7] Trend Tracking Indexes (TTIs) - The largest options expiration in history, amounting to $7.1 trillion, occurred without significant disruptions, indicating strong market control by bullish investors [10] - Both Domestic and International TTIs maintained elevated positions above their respective moving averages, with the Domestic TTI at +6.23% and the International TTI at +9.47%, both signaling a "Buy" [10]

Political Analysis - Trump's prime time address received poor reviews, described as a "political nothing burger" and "pointless" [2] - Trump's economic approval rating hit a new low of 33% [3] - Trump's approval on handling the rising cost of living sank to 27%, the lowest of the year [7] - The administration's deportation policies targeted individuals beyond those with criminal records, contradicting campaign promises [9][10][11] - Mass protests and civic engagement are critical to maintaining democracy [14][15] Economic & Tech Trends - AI companies significantly prop up the economy, and removing them presents a different economic picture [19] - Nvidia became the first company to reach a $5 trillion valuation [18]

Group 1 - US stocks experienced a rebound with the S&P 500 rising 0.8% and the Nasdaq Composite gaining over 1.3% after a recent losing streak, driven by signs of cooling inflation and reduced AI concerns [1] - The S&P 500 and Nasdaq recorded weekly gains of 0.1% and 0.4% respectively, while the Dow Jones fell 0.6% during the last full week of trading in 2025 [2] - Oracle's stock surged following a deal with China's ByteDance to create a US TikTok joint venture, while Nvidia's shares rose on news of the US reviewing sales prospects for its H200 chips in China [3] Group 2 - Nine pharmaceutical companies reached agreements with the Trump administration to lower drug prices for some Americans in exchange for a three-year tariff exemption on their products [4] - A more favorable inflation outlook and a weakening job market have led to renewed hopes for continued easing by the Federal Reserve, with traders betting on two rate cuts next year [5] - The benchmark 10-year Treasury yield rose to 4.15% as global bond markets reacted to the Bank of Japan's interest rate hike, marking the highest level since 1995 [6]

Core Insights - US Treasuries experienced their first weekly gain since late November, driven by lower-than-expected inflation and a rise in the unemployment rate, leading to expectations of at least two rate cuts by the Federal Reserve next year [1][3] - The 10-year Treasury rate fell by four basis points over the week, while the two-year yield also decreased by a similar amount, indicating a more dovish outlook for 2026 [1][3] Market Reactions - The US unemployment rate reached a four-year high, and core inflation was reported at its slowest annual pace since early 2021, which contributed to a more optimistic market sentiment regarding future rate cuts [3] - Money markets are now pricing in two quarter-point cuts next year, with a 40% probability of a third cut, widening the gap between two-year and 10-year yields to 67 basis points, the largest since January 2022 [3] Investor Sentiment - With major data releases not expected until January, investors are adopting a cautious stance as they approach the new year, reflected in the ICE BofA MOVE Index, which indicates the lowest expected bond-market volatility since 2021 [4] - Analysts from TD Securities noted that uncertainty in data will keep investors alert, with ongoing labor market concerns suggesting potential downside risks to rates [5]

Bond Market Overview - The US is cutting interest rates while the Bank of Japan has raised rates to 30-year highs, impacting global yields [1] - The 10-year and 30-year bond yields are reaching multi-decade highs due to these changes [1] Economic Sentiment - The University of Michigan sentiment index reported a historically low current situation score, the lowest since the 1970s at 52.9% [2] - This low confidence level typically correlates with declining equity markets, yet equities are currently rising, indicating a disconnect [3] Inflation and Market Reactions - Recent CPI data has been deemed inaccurate, yet the market seems to overlook this, with yields on both 2-year and 10-year bonds increasing [4][5] - The French 10-year bond yield closed at 3.61%, marking a 14-year high, while the Japanese 10-year yield surpassed 2%, a 26-year high [6] Global Interest Rate Trends - The tightening of global monetary policy, particularly from Japan, is affecting investment strategies and arbitrage opportunities worldwide [7]

Let's check in on the bond markets now. While the US is cutting rates, the Bank of Japan raised interest rates to 30-year highs. And that has yields on the move globally, pushing its 10 and 30-year to multi-deade highs, as you can see there.Rick Santelli is tracking all the action in the bond report. Rick, what can you tell us. >> Absolutely.And we'll get to the foreign global interest rates in a second, but you know, this morning, University of Michigan sentiment, it was definitely weak. current uh situati ...

Market Overview - Value stocks have shown signs of life, outperforming the market in the current quarter, with S&P value leading [1][2] - Only two of the FAANG stocks have outperformed the market this year, indicating a shift in market dynamics [2] Investment Strategy - Investors are advised to stay invested and avoid trying to time the market, focusing on less popular sectors that are not leading the market [3][5] - Healthcare is highlighted as a favorable sector due to its affordability and lower economic sensitivity, making it a good option if the economy slows [3][5] Stock Picks - UPS and Kimberly Clark are identified as attractive investment opportunities, both down nearly 50% from their highs, with Kimberly Clark offering a PE of 12 compared to its usual 19 and a safe dividend yield of 5% [6][10] - UPS has seen a significant drop of 60% from its highs, but the company is moving away from its reliance on Amazon, which could improve its performance [11] Market Trends - There is a belief that the current inflationary environment will persist, similar to trends seen in the 1970s, which could benefit materials and commodities [13]

Food Price Trends - The analysis suggests food prices will not remain as high as in 2025 due to the anticipated easing of certain commodity prices and tariff dynamics [1][2][3] - Companies like General Mills and PepsiCo are already lowering prices, raising the question of whether these price reductions will be sustainable [5] - The unwinding of COVID-era inflation is contributing to savings for consumers on grocery items [6] Consumer Behavior & Economic Impact - The report highlights a "K-shaped" economy, emphasizing the impact of pricing on low-income consumers' consumption of daily use consumer staples [7][8] - High-income consumers' consumption of daily use categories is less sensitive to economic conditions compared to low-income consumers [8] - Volume drag from low-income consumers will be a key indicator in 2026 [8][9] Top Picks & Investment Opportunities - Top picks for the next year include Coke, Monster, and Vitita Cocoa (coconut water) [9] - Vitita Cocoa benefits from structural growth as a workout and recovery drink, and from tariff exemptions [9][10] Company Performance - Lamb Weston's margin improvement and outlook, particularly in international markets, have been disappointing [12] - Lamb Weston's sales were in line with expectations, but margin improvement was the key issue [12][13]

Eurozone consumer sentiment unexpectedly weakened in December despite cooling inflation and economic resilience against tariffs https://t.co/fFLzXf9Hk5 ...