Dec 24 - Daily Market Updates

Markets Daily — Broad Market Update

Overview

Global markets are treading lightly into the holiday period. Equity futures in the US are little changed after a strong year-to-date run, European benchmarks are marginally firmer in thin trading, and Asia was mixed with mainland China edging higher. Bond markets are calm as traders wind down risk and liquidity thins. The US dollar remains softer on the year, while precious metals are firm as investors balance geopolitics and the prospect of further policy easing in 2026. Several exchanges are operating on shortened schedules around Christmas.

Equities

US: Futures are flat to slightly lower as investors weigh year-end rebalancing, a lighter data calendar, and a strong seasonal backdrop. The broader index remains near record territory after multiple weeks of gains.
Europe: Stocks are fractionally higher in holiday-thinned volumes. Defensive sectors and select financials are supported by stable yields; cyclical exposures are mixed.
Asia: Mainland China stabilized with a modest uptick, while other regional markets delivered a mixed performance amid cautious risk-taking.

Rates

US Treasuries are steady with the curve little changed. With few catalysts before year-end, ranges may remain tight, though liquidity could amplify intraday swings.
Core European yields are broadly stable; peripherals are tracking risk sentiment.

Currencies

The dollar index is lower year-to-date, reflecting a shift toward a gentler policy trajectory and improving risk appetite. High-beta and commodity-linked currencies have firmed on the margin, while safe-haven FX is subdued.

Commodities

Precious metals extended gains, supported by geopolitical unease, softer real yields, and continued diversification flows. Industrial metals are holding recent advances on improving supply-demand expectations into the new year.
Crude prices are range-bound as supply dynamics and growth expectations offset each other into year-end.

ETFs: A blockbuster year, with a note of caution

US-listed ETFs are closing the year with standout net inflows, robust primary market activity, and elevated secondary trading. Product launches accelerated across both broad beta and thematic exposures.
The backdrop—rising equities, easing-rate expectations, and active sector rotation—has been a tailwind for both equity and fixed income ETFs. Liquidity and tax efficiency continue to attract both retail and institutional users.
Looking into next year, expect a more discerning environment: fee competition, product differentiation, and higher scrutiny on niche themes. If volatility picks up, flows may consolidate into core, low-cost exposures and high-quality bond sleeves.

Corporate highlights (broad)

Year-end dealmaking remains active with selective asset sales and bolt-on acquisitions across energy, healthcare, and infrastructure, underscoring ongoing portfolio optimization and balance-sheet discipline.
Index changes and periodic reconstitutions are driving stock-specific flows. Buyback authorizations and insider purchases continue to offer signals on corporate confidence but effects are idiosyncratic.

Geopolitics and regional themes

Hopes for de-escalation in parts of Eastern Europe have supported regional assets, though positioning remains cautious given headline risk and uncertainty around the contours of any agreement.
Developments in Latin America are contributing to commodity and FX volatility; policy continuity and fiscal signals will be closely watched in early 2026.

Policy watch

Debate around the appropriate inflation target framework has resurfaced in policy circles. While any formal change would be a multi-year process, markets are sensitive to signals on the tolerance band around inflation and the path for real rates.
Into January, attention turns to the next set of inflation and labor data, and to central bank communications that could refine the pace and timing of potential rate cuts.

What we’re watching next

Liquidity and rebalancing effects through the final sessions of the year
Early-January data on jobs, wages, and inflation expectations
Q4 earnings season previews, with a focus on margins, capex discipline, and AI-related spend
Credit market tone as new-issue windows reopen
China’s policy signals and growth stabilization efforts

Portfolio considerations (not investment advice)

After a strong run for risk assets, consider balance across quality, duration, and liquidity. Core fixed income can provide ballast if growth slows more than expected.
If volatility normalizes higher, systematic rebalancing and option-based hedges may help manage drawdowns.
Within equities, earnings resilience and balance-sheet strength remain key differentiators; within credit, dispersion argues for careful issuer selection.

Calendar (abridged)

Holiday-shortened sessions in several major markets
Light data slate into year-end; fuller macro calendar resumes in early January

This publication is for information only and is not a recommendation or investment advice. Markets are volatile and subject to change. Please consider your objectives and risk tolerance and consult a licensed advisor before making investment decisions.

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