Going out quietly, with stocks flat in the final week of trading.
The market is picking up the underperforming sectors, where all 5 sectors in the green in the last 5 days (energy, real estate, consumer staples, utilities, and healthcare) are the same sectors that are in the red for the trailing month. Only 2 sectors are in the red YTD: consumer staples and real estate. The only sectors delivering +20% in ’25 are technology and communication services (Mega Tech), which are also the only sectors +100% for the trailing 3 years. The winners keep winning.
This morning, the is flat, as is the NASDAQ, while the and Russell 2000 are slightly in the red. The is flat as well. International markets are firmly in the green. Interest rates are flat today across the curve. International yields are markedly higher on the day, with the Japanese 10-year back to 2.08%. The US dollar Index is higher modestly but still well below 98, a lot closer to the 95.8 low for the year than the 110 high.
On the commodity front, precious metals have rebounded a majority of yesterday’s severe sell-off, with up 7.9% today. is holding onto $58/bbl, to $4/mcf, and gasoline above $1.7/gal. Crypto is slightly higher with at $89.2K.
With tomorrow being an early close, we cannot expect much fireworks. Friday is a full day, but being wedged between New Year’s Day and the weekend, it’s unlikely to be a high-volume day.
Early into 2026, we are likely to see some tax-driven profit taking, but optimism for strong economic growth, and eventually, more aggressive rate cuts by the Fed. We should be seeing upward momentum in stocks before mid-January. The trend remains positive.