Market Update

• SCOTUS tariff decision day, maybe
• Earnings rolling out
• PPI about in line, Retail Sales a bit better, data still messy
• Equities under pressure
• Check out some of the recent ICE Data/Content:
• Inside The ICE House
  • Episode 508: Chipotle CEO Scott Boatwright on 4,000 Restaurants and Keeping Customers Craving More
  • ICE First Look at Mortgage Performance: Seasonal and Calendar Factors Drive Rise in November Delinquencies
  • ETF Central: NYSE 2025 ETF Wrap-Up: Trends, Takeaways, and What's NextMarket Story Lines

MAC Desk Commentary:
Due to internal meetings we're publishing an abbreviated note today.   
 
We’re hosting a webinar on the outlook for 2026 today at 11:30am ET. You can sign up here. Also, stay tuned for our Q4 Earnings writeup.
 
As we await, again, the SCOTUS decision on the tariff case (expected during today’s opinions release) S&P futures are under pressure this morning, moving lower along with European equities around 5am as crude rose sharply. Mega bank earnings continue to roll out. This morning includes Bank of America (lower pre-market), Citi (higher) and Wells Fargo (lower). BAC and WFC commented on strong/resilient consumer and business in their releases. Yesterday the S&P ended modestly lower with loses cut after a rally into the close. The equal-weight was flat and the Russell 2000 was slightly lower. The big banks kicked off earnings, with JP Morgan and Bank of New York leading the way, but the Financial sector was the worst performer. Pressure on credit card and payment names from possible rate caps continued. Despite the lack of overall price changes there was constant movement of strength and weakness across sectors.

Futures

 
December’s CPI was the headliner yesterday for data and it was basically an inline print, with the inability to produce a regular CPI print for October and November due to the shutdown mucking up the analysis. Today’s data includes PPIs for both October and November. November looks about inline on a monthly basis but above on a yearly look, while Core was flat, ticking down sequentially and below estimates. Retail sales beat estimates and accelerated from the prior month. The control group was in line and ticked down sequentially. 
 
Treasury yields didn’t react much to the data, currently down 1-2bp and the US Dollar Index is lower with the Yen bouncing after weakening to ¥159/$

• US 2yr -1bps to 3.52%, 5yr -2bps to 3.74%, 10yr -2bps to 4.16%, 30yr -2bps to 4.82%
• USD index: -$0.07 to $98.84

We have a new bottleneck to monitor: glass cloth fiber. The Nikkei has a story about a shortage of these components that’s impacting printed circuit boards. Several suppliers are based in Japan. Pressure on public companies in select industries to limit share repurchases is an emerging trend on which the MAC Desk has been focused. We can put a few more checks in the column after reports that Director of Federal Housing Bill Pulte has applied pressure on homebuilders to prioritize construction over buybacks. Defense contractors have a companion with which to commiserate.   
 
European equities are modestly higher though Germany is the outlier, down 0.5%. Japan added to its sharp gains on Tuesday with another strong performance as the Takaichi trade kicks into another gear. An official call for snap elections appears imminent. The yen hit an all-time low against the Euro. Chinese markets were mixed but leaned higher. Margins requirements were tightened on several exchanges as officials look to keep equity markets from overheating. The latest trade data showed a record $1.2 trillion trade surplus in 2025, despite US exports falling 20%. According to reports, several Chinese companies were told to avoid cybersecurity products from US and Israeli companies including VMWare, Palo Alto, Fortinet, and Check Point citing national security concerns. 



Commodities are moving higher again with the exception of natural gas. Yesterday, ICE Brent closed above its 200d ma (~64.25) for the first time since Q3 as the situation in Iran moves to center stage. Prices pulled back modestly overnight before turning higher this morning around 5:00 am est, currently trading up ~1% just over $66. Inventories will be released at 10:30 after API data showed builds overnight. Natural gas is down ~5% reversing the bounce over the last two sessions. Ag commodities are moving modestly higher recouping some of the losses after the USDA released its Grain Stocks report earlier this week. Crypto moved higher yesterday extending to the upside after the close amidst reports that senators have been filing amendments ahead of a Senate Banking Committee meeting on Thursday. 



Yesterday, Bitcoin moved above the 50d ma (~91.5k) and is now testing recent highs ~95k. For reference the 200d is just under 105k. Ethereum was trading around 3,200 as US equities closed yesterday and is currently trading 3,300.


Economic Data:  
US:

• Mortgage applications: 15.9% vs. -6.2% prior
  • Refis: +40.1% vs. 7.4% prior
• PPI Oct m.m: 0.1% vs prior 0.6%
• PPI Nov m.m: 0.2% vs 0.2% cons., prior 0.1%
  • Core PPI: 0.0% vs 0.2% cons.
• Retail Sales m.m: 0.6% vs 0.4% cons., prior 0.0%
  • Control Group m.m: 0.4% vs 0.4% cons, prior 0.6%
• 10:00am Existing Home Sales
• 10:00am Business Inventories
• 10:30am EIA Crude Inventories
• 2:00pm Fed Beige Book
• Fed Speakers: Miran (10am), Bostic, Kashkari (12pm), Williams (2pm)

Global:

• China Trade Balance, Dec: $114.14B vs $113.6B cons., prior $111.68B
  • Exports: 6.6% vs 3.0% cons., prior 5.9%
• Imports: 5.7% vs 0.9% cons., prior 1.9%