Market Update

DOW 49,536 (+387), S&P 500 6,974 (+48), Russell 2000 2,685 (+33), NYSE FANG+ 15,723 (+169), ICE Brent Crude $63.37/barrel (-$3.15), Gold $4,616/oz (-$20), Bitcoin ~96.5k (-1015)

• Markets celebrate Harbaugh’s hiring 
• Return to normalcy as Tech leads
• Better earnings reactions from the Financials
• Yields higher, econ data solid
• 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:
Yesterday the S&P 500 fell 0.5% but a broader view of the market was more picturesque. The equal-weight and the Russell 2000 finished in the green, outperforming by ~1%. We assume the strength of the market overall was driven by optimism of the NY Giants closing in on hiring John Harbaugh as the next Head Coach and finally lead the team back to .500 football. That helped paper over the disappointment of not getting a decision from the Supreme Court on the IEEPA tariff case in the morning. The court didn’t announce the next date when it will issue rulings, but will likely be Tuesday or Wednesday.  The bigger question is if IEEPA is part of those decisions. Legal analysts we’ve read have said that each week without a decision increases the likelihood of the administration prevailing. However, most still believe Trump will lose the case and prediction markets have it at about a 70% probability, only a slightly better outlook for the administration after the non-verdict.   

The early trend this year of outperformance from sectors unloved last year, and other indexes against the S&P 500 continued. Tech and Discretionary were under pressure yesterday while the rest of the sectors were mostly higher, with Financials and Materials marginally lower. Mega Caps/growth were hit as the 12 largest companies were all negative. Travel & Leisure, retailers and apparel for Discretionary and software for Tech saw the some of the largest declines. Another trend to note is the weakness in Financials early in the reporting cycle. All three of the megabank reporters yesterday were lower despite decent earnings. That followed JP Morgan’s move lower on Tuesday. 

Today the S&P 500 is looking better after reports said Harbaugh’s deal is all but signed. Apparently the market cap-weighted index was waiting for more confirmation. Earlier in the morning futures were already trading up before economic data sent them even higher. Initial claims printed a sub 200k number and below estimates. Continuing claims also remained at low levels, moving back below 1.9m. The Empire and Philly Fed Manufacturing reports improved from last month, contributing to the gains. The S&P's gains are not coming at the expense of smaller caps names as they continue to outperform. 



Tech is back in a familiar leadership position today, with the semis leading the way after Taiwan Semi’s strong earnings overnight (they pre-announced earlier). The Q1 guide is above the Street while management upped long-term revenue growth from 20% to 25%, and AI sales to 50%, from 40%. The company also continued the trend of capex increases, taking 2026 spending plans from $46B previously to $52-$56B. The trend of post-earnings weakness in Financials is also reversing today as Blackrock, Morgan Stanley and Goldman Sachs trade higher and well above initial levels. Healthcare is the only sector materially lower. As the JP Morgan conference winds down there was a big deal announced with Med Device maker Boston Scientific buying Penumbra for $14B. Penumbra was rumored to be in play yesterday. The device group is sliding however, and biopharma is lower as well. The FDA is reportedly pushing back its timeline for review of several drugs in the queue.  


 
Treasury yields spiked several basis points following the low jobless/continuing claims print this morning. That took yields from around flat to up a couple of basis points across the curve.  Fed governor Barr came out swinging in his interview with Yahoo Finance, saying the administration’s ongoing inquires amount to “an assault on the independence of the Fed." Notably however the 30y is flat. The US Dollar Index is higher, back above 99.

• US 2yr +3bps to 3.55%, 5yr +4bps to 3.75%, 10yr +2bps to 4.16%, 30yr +1bps to 4.79%
• USD index: +$0.32 to $99.23

Europe was mostly higher though France was a bit lower. Tech names were strong on TSM’s earnings. UK GDP improved and Europe’s Industrial Production beat estimates. The Nikkei took a pause overnight following recent strong gains fueled by election tailwinds, as the government moves closer to parliament dissolution and snap elections to consolidate its political strength. Rare earth names in the region are seeing sharp gains. In China, Hang Seng and Shanghai were both lower. China’s central bank is reportedly looking into incremental stimulus for private and tech firms and cutting lending rates.  South Korea was a leader on the semiconductor strength.

 

Brent crude is pulling back as Iranian tensions come off the boil, at least for now. Dutch natural gas is sharply higher with low temperatures hitting Asia and Europe and low storage levels. Precious metals are also lower but off their worst levels, and copper is down as well. Ag was broadly higher but has turned modestly lower. Bitcoin and Ethereum are tying to stay flat. The Senate cancelled a vote on the CLARITY Act and Coinbase pulled its support for the bill, with the issue of paying interest on payment stablecoins the major hurdle. The rancor is enough to potentially torpedo a full vote in 2026 according to reports.  



Economic Data:
US:

• Initial Jobless Claims: 198k vs 215k cons., prior 207k
  • Continuing Claims: 1884k vs 1890k cons., prior 1914k
• Empire Manufacturing Index: 7.7 vs 1 cons., prior -3.7
• Philly Fed Index: 12.6 vs -2 cons., prior -8.8
• Fed speakers: Goolsbee, Bostic, Barr, Barkin
• Export Prices y.y: 3.3%
• Import Prices y.y: 0.1%
• EIA Nat Gas inventories: -71Bcf vs -90Bcf cons., prior -119Bcf
• 4:00pm TIC Flows

Global:

• Japan PPI m.m / y.y: 0.1% / 2.4% vs 0.1% / 2.4% cons., prior 0.3% / 2.7%
• South Korea rate decision: Held at 2.5% as expected
• UK GDP Nov m.m / y.y: 0.3% / 1.4% vs 0.1% / 1.1% cons., prior -0.1% / 1.1%
• ECB Economic Bulletin
• Germany GDP 2025: 0.2% vs -0.5% prior
• Europe Trade Balance: €9.9B vs €15.2B cons., prior €17.9B
• Europe Industrial Production m.m / y.y: 0.7% / 2.5% vs 0.5% / 2.0% cons,. prior 0.7% / 1.7%