Stocks Little Changed Heading Into Year-End

The S&P 500 Index ($SPX) (SPY) is unchanged, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.06%.  March E-mini S&P futures (ESH26) are up +0.02%, and March E-mini Nasdaq futures (NQH26) are down -0.02%.

Stock indexes are little changed ahead of today’s early close at 1pm Eastern time and Thursday’s Christmas holiday.  Stocks have continued support from confidence about the US economic outlook after Tuesday’s news that US Q3 real GDP rose by +4.3% (q/q annualized), much stronger than market expectations of +3.3%.  However, most of Tuesday’s other US economic reports were on the weaker side, led by the -3.8 point drop in the Conference Board’s Dec US consumer confidence index to 89.1 from the revised Nov level of 92.9 (preliminary 88.7), which was weaker than market expectations of 91.0.

In a report released today, US weekly initial unemployment claims fell by -10,000 to 214,000 in the week ended Dec 20, showing a stronger labor market than expectations of 224,000.  Continuing claims rose by +38,000 to 1.923 million from the previous week’s revised 1.885 million (preliminary 1.897 million), which showed a weaker labor market than expectations of 1.900 million. 

China’s central bank today issued a cautious statement after its quarterly monetary policy meeting.  The PBOC indicated that it is focused on long-term stability and suggested that it will not engage in sudden interest rate cuts to address problems such as property market weakness, weak domestic demand, and the trade war with the US.

Seasonal factors are bullish for stocks.  According to data from Citadel Securities, since 1928, the S&P 500 has risen 75% of the time in the last two weeks of December, climbing 1.3% on average.

The markets are discounting the odds at 13% for a -25 bp rate cut at the FOMC’s next meeting on Jan 27-28.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is down -0.05%.  China’s Shanghai Composite closed up +0.53% for the sixth consecutive daily gain.  Japan’s Nikkei Stock 225 closed down -0.14%.

Interest Rates

March 10-year T-notes (ZNH6) today are up 2.5 ticks.  The 10-year T-note yield is down by -0.8 bp at 4.155%.  T-note prices are slightly higher despite supply overhang as the Treasury today sells $44 billion of 7-year T-notes.  Also on the bearish side, the 10-year breakeven inflation expectations rate is up +0.8 bp at 2.248%.

European government bond yields are lower.  The 10-year German bund yield is down -3.6 bp at 2.862%.  The 10-year UK gilt yield is down -0.2 bp at 4.507%.

Swaps are discounting a 3% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.

US Stock Movers

The Magnificent Seven stocks mixed today.  Apple (AAPL) is up +0.5, but Tesla (TSLA)

and Nvidia (NVDA) are down about -0.8%.

Intel (INTC) is down about -2% after Reuters reported that Nvidia (NVDA)halted a test using Intel’s 18A manufacturing process during a test run to make advanced chips, suggesting Nvidia sees deficiencies in the technology. Nvidia agreed to invest $5 billion in Intel in September as part of the deal, where the Trump administration took a 10% stake in Intel as a means to reinvigorate the US-based chip producer. 

Otherwise, chip stocks today are mixed.  Micron Technology (MU)is up more than +3%, but Marvel Technology (MRVL) is down about -1%.

Cryptocurrency-exposed stocks traded lower, with Bitcoin (^BTCUSD) falling about -0.9%. 

Coinbase Global (COIN), Strategy (MSTR), and Galaxy Digital Holdings (GLXY) are down more than -1%.

Key miners are trading lower despite the fact that gold, silver, and copper all posted new record highs today.  Freeport-McMoRan (FCX) and Newmont Mining (NEM) are down more than -1%.

AST SpaceMobile (ASTS) is down more than -4% even though the company launched its largest satellite yet, beginning its effort to build a satellite-based Internet network to compete with SpaceX’s Starlink service.

Dynavax (DVAX) soared by more than +30% after news that Sanofi will buy the vaccine maker for about $2.2 billion. 

Earnings Reports(12/24/2025)

None.