All major indexes are within earshot of closing record highs as we wind down the calendar year. Despite the holiday shortened Christmas week (next week will be shortened as well), stocks pushed higher amidst some delayed, yet positive economic news, including the first look at Third Quarter Gross Domestic Product (GDP). As noted last week, “we’ve seen this type of action before as concerns over the durability of the AI trade have come to the fore. At this time, we think this theme has some legs, which given its weighting in the S&P 500 may result in the index churning around a bit. We also believe that although we wouldn’t write them off, calendar year 2026 will be one during which more than just three sectors (Information Technology, Communication Services & Consumer Discretionary) participate in this bull market.”
- Please pardon the abbreviated version of the “Snapshot” as, other than economic data, there is historically not a lot of news during the Christmas Week, and this year was no different. In addition, we thought we might relax a little bit ourselves as well as continue to plan for 2026! Best wishes for all for a healthy, happy and prosperous New Year!
It’s The Economy…”
- Initial Claims for Unemployment Benefits for the week ended December 20th fell 10,000 to 214,000 from 214,000, which was unrevised. Meanwhile, the four-week moving average fell 750 to 216,750 from 217,500, which was also unrevised. Continuing claims for the week-ended December 13th rose 38,000 to 1,923,000 from 1,885,000 the prior week. The continuing claims four-week average fell 5,250 to 1,893,750 from 1,899,000. (Source, U.S. Department of Labor)
- Orders for Durable Goods (those expected to last at least three years) slid 2.2% during October, after rising 0.7% in September. Smoothing out the m/m volatility, Orders for Durable Goods have risen 4.8% y/y. Transportation Equipment Orders fell 6.5% (7.3% y/y), after jumping 0.6% the prior month. Excluding transportation, new orders rose 0.2% during October (2.4% y/y), after rising 0.7% during September. (Source, U.S. Census Bureau)
- Third Quarter Gross Domestic Product (initial estimate), as reported by the Commerce Department, a tally of the output of all goods and services in the United States, rose at an annualized rate of 4.3% (2.3% y/y), up from 3.8% during Q2. Final Sales to Domestic Purchasers rose at an annual rate of 3.0% (2.6% y/y), up from 2.9% in Q2. Government Spending (Government Consumption Expenditures and Gross Investment) rose 2.2% (1.1% y/y) during Q3, after easing 0.1% during the second quarter. Inventory Effect (line 40) subtracted 0.22% from Q3 GDP, less than the previous quarter’s -3.44%. The GDP Chain Price Index rose 3.8% (SAAR) during Q3 (3.0% y/y), after rising 2.1%in Q1. The PCE Price Index Excluding Food and Energy rose 2.9% (2.9% y/y) (SAAR) during Q3 after climbing 2.6% in Q2. (Source, U.S. Bureau of Economic Analysis)
- Industrial Production, a measure of strength in the manufacturing, factory and utility sectors, rose 0.2% during November (2.5% y/y), after falling 0.2% in October. Capacity Utilization rose to 76.0% during November from 75.9% in October but has risen from 75.2% one year ago. Manufacturing Capacity remained steady at 75.4% during November versus October and as compared to 74.7% one year ago. (Source, U.S. Federal Reserve)
- The Conference Board’s Consumer Confidence Index fell to 89.1 (-18.6% y/y) during December from 92.9 in November. The present situation index slumped to 116.8 in December from 126.3 (-18.9% y/y) while the expectations component remained at 70.7 during December when compared to November (-18.3% y/y). Those surveyed saying that jobs are “hard to get” rose to 20.8% of respondents during December from 20.1% in November while those claiming that jobs were “plentiful ”fell to 26.7% of respondents from 28.2% during those same months.
Economic Reports scheduled to be released this week, include the following – on Wednesday, Initial Claims for Unemployment Benefits.
Several potentially market moving companies are scheduled to report earnings, to include No Companies of note are scheduled to report earnings this holiday week.