Dec 15 - Daily Market Updates

Markets Daily | Broad Market Update

Overview

Global risk appetite stabilized to start the week. US equity futures edged higher as the recent selloff in large-cap technology cooled, while European benchmarks advanced and Asia was mixed with Japan lagging. Core government bond yields eased a touch, the dollar was little changed on balance, and commodities firmed with precious and industrial metals supported. Crypto prices also traded higher.

Market snapshot

Equities: US futures up modestly, Europe broadly higher with cyclicals and miners leading, Japan softer following recent strength; small caps showing signs of catch-up versus mega caps.
Rates: Treasury yields drifted lower along the curve, with the long end outperforming; markets continue to debate the pace and extent of policy easing next year.
FX: Dollar broadly range-bound against G10; selective strength in high-beta currencies alongside improved risk tone.
Commodities: Gold hovered near cycle highs as real yields eased; copper recovered part of last week’s drop; oil steady within recent ranges.
Digital assets: Major tokens advanced, with bellwether names extending month-to-date gains.

Key themes we’re watching

Rotation beyond mega-cap tech: After a multi-quarter run in AI-heavy leaders, investors are reassessing valuations and diversifying into under-owned areas. Flows continue to rotate toward economically sensitive sectors, select industrials, energy, and parts of health care, as well as small and mid caps. Market breadth improvement is a constructive sign for bulls.
Soft-landing versus slowdown: Incoming data continue to point to moderating inflation and a cooler—but still resilient—labor market. Whether hiring decelerates gently or more abruptly will be pivotal for the rates path and equity leadership into the new year.
Policy outlook: Markets are pricing additional policy easing across major developed economies in 2026, with the path dependent on labor trends and inflation stickiness. Communications from central bank officials remain focused on data dependence and financial conditions.
China’s domestic demand: Recent figures suggest investment and household spending remain subdued, keeping external demand an important growth driver. This dynamic bears watching for global trade relations and commodity demand

This week’s highlights (global)

United States: A busy slate with labor data and inflation prints in focus. Markets will parse employment and consumer price figures for confirmation of disinflation alongside a gradual cooling in hiring. Retail activity and regional manufacturing surveys will add color on year-end momentum.
Europe and UK: Flash PMI updates and inflation readings will set the tone ahead of holiday liquidity; policy signals remain cautious as growth stays uneven.
Asia: Multiple rate decisions across the region, plus Japan inflation and activity gauges. China’s monthly data pulse is in focus for signs of stabilization.
Latin America and Canada: Select policy meetings and retail/price data; Canada’s inflation and consumer trends will help shape early-2026 rate expectations.

Sector and asset-class color

Technology: Earnings revision dispersion is widening. While secular AI demand remains a tailwind for infrastructure names, investors are scrutinizing spending paybacks and potential cannibalization across software categories.
Industrials/materials: Benefiting from rotation and firmer metals; watch guidance tied to capex cycles and order backlogs.
Energy: Crude is range-bound as supply discipline offsets concerns about global growth. Integrateds and select services names continue to trade with implied volatility tied to OPEC+ headlines and inventories.
Financials: Credit metrics remain solid overall; funding costs and the shape of the yield curve remain key swing factors for net interest margins.
Precious metals: Support from lower real yields and macro hedging demand; dips continue to find buyers.
Credit: Spreads are tight by historical standards; primary issuance windows may narrow into year-end, but liquidity remains orderly.

What could move markets next

Labor-market inflection: Any downside surprise in job growth or uptick in unemployment would likely extend the rally in duration and favor defensives over cyclicals near term; a firmer print could revive the “higher-for-longer” debate.
Inflation progress: Core measures continue to trend lower, but services components are sticky. A faster decline would unlock greater policy flexibility.
Policy messaging: Speeches from central bank officials will be parsed for guidance on the runway and cadence of future rate moves.
Year-end dynamics: Rebalancing, tax-loss harvesting, and thinner liquidity can amplify short-term moves. Watch market breadth, leadership, and options positioning as catalysts.

Risk radar

Growth disappointments in China or Europe that spill over into global manufacturing and commodities.
Earnings downgrades if margin resilience fades as pricing power normalizes.
Geopolitical flare-ups affecting energy supplies or trade routes.
Liquidity pockets into year-end that exacerbate intraday volatility.

The near-term tone is cautiously constructive: a steadier rates backdrop, improving market breadth, and resilient earnings expectations support risk assets. The path from here hinges on labor and inflation data. A gradual cooling remains the “goldilocks” outcome for both equities and duration, while any sharp turn in employment would argue for more defensive positioning and longer-duration exposure.

Note: This publication is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Markets are volatile and subject to change without notice.

Disclaimer:

Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin.

Rolling Spot Contracts and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of our retail client accounts lose money while trading with us. You should consider whether you understand how Rolling Spot Contracts and CFDs work, and whether you can afford to take the high risk of losing your money.