Though equities remained near all-time highs, the wall of worry around the AI buildout theme continued to dampen sentiment in tech. By Wednesday Oracle shares had broken below $180 while Nvidia fell to 3-week lows, masking continued broadening away from tech heading into the final weeks of 2025. Bitcoin remained mostly heavy, unable to climb back above $90K. Initially crude prices dropped on lingering hopes of peace in the Ukraine before rebounding on signs the White House is considering military action against Venezuela. Brent dipped below $60/barrel for the first time since May. US Treasury yields remained range bound despite a cooler than expected inflation print and higher than forecast unemployment rate. For the week, the S&P edged up 0.1%, the DJIA lost 0.7%, and the Nasdaq rose 0.5%.
Key US economic readings that had been delayed due the government shutdown took center stage. The November US unemployment rate climbed to its highest level in more than four years at 4.6%. Wage growth was cooler than expected while October/November payrolls were short of expectations, largely on the back on declines in government jobs. November CPI data was unquestionably bullish, driven by the lowest core y/y print in nearly 4 years, but both economists and the bond market cautioned against reading too much into the report because of gaps in data collection during the long government shutdown. Separately, S&P PMI surveys pointed to slower growth amid stubborn inflation. Overall, the numbers didn’t change the narrative around the Fed likely standing pat in January. Friday, NY Fed President Williams leaned on that notion, indicating he thought both the CPI and unemployment rate were probably skewed by ~0.1% due to technical factors around the unusual circumstances. He underscored he wasn’t changing his outlook, reiterating the Fed remains well positioned to wait for additional data with no sense of urgency to act now. Conversely, Fed Governor Waller doubled down on his dovish outlook, making his case for the Chairman role ahead of a final White House interview. Press reports stated he is still in the mix ahead of Trump’s expected decision in early January, as some senior officials are said to have been questioning the front-runner Hassett’s suitability for the role.
Outside the US, the Pound and GILT yields both moved lower following a cooler than expected UK inflation print. The ECB left rates unchanged, as expected, and very well could be done with its current rate cutting cycle. The Bank of England cut by 25 bps, also expected, while expectations for 2026 cuts were ratcheted back slightly. Mexico, Chile, and Thailand central banks also cut rates. The Japanese Yen came under renewed pressure after the BOJ raised rates, as expected. Governor Ueda provided only limited clarity on the timing and pace of future rate hikes which markets appeared to interpret as a lack of strong commitment to aggressive tightening. The Yen hit a record low against the Euro and approached the lows of the year against the dollar despite an attempt by the Japanese Fin Min to verbally intervene.
AI continued to be a central focus of corporate news, but transports and consumer goods names also had important developments this week. Oracle shares sagged most of the week as ongoing worries about funding for its ambitious build out plans lingered. The company pushed back on a concerning report that funding for a $10B Michigan data center is in doubt. A blowout earnings report from Micron and speculation that OpenAI was in talks to raise a staggering $100B in its latest funding round perhaps helped turn the sentiment tide late in the week. Nike shares were hit after solid Q2 results were called into question over still decidedly weak China results and guidance for additional gross margin erosion next quarter. Among the transport names, Ford got a vote of confidence from investors after biting the bullet on the EV market and taking $19.5B in charges as it looks to shift focus to hybrid vehicles. FedEx reported strong results for Q2 and said the spinoff of FedEx Freight is on track for mid-2026. Cruise operator Carnival also reported strong quarterly numbers as it continues to see new record booking volumes, allowing management to reinstate its dividend which had been terminated during the pandemic. Also notable for the transportation sector, Maersk announced that for the first time in nearly two years one of its ships had transited the Bab el-Mandeb Strait and into the Red Sea, a sign of some normalization in the region’s sea freight commerce.
MON 12-15
(CA) CANADA NOV CPI M/M: 0.1% V 0.1%E; Y/Y: 2.2% V 2.3%E
(JP) Japan BOJ said to start selling ETF holdings by as early as Jan, 2026 - financial press
(US) DEC EMPIRE MANUFACTURING: -3.9 V 10.0E
(UR) Kyiv International Institute of Sociology (KIIS) poll: 75% of Ukrainians (the same as in September) reject a plan that would, among other things, include the withdrawal of troops from Donbas, restrictions on the size of Ukraine’s army, and at the same time, would not contain specific security guarantees
Counterpoint Research: Sees 2026 global smartphone shipments -2.1% y/y (v +3.3% y/y) as a shortage of memory chips drives up costs and squeezes production
F Confirms to take $19.5B in EV-related charges; Raises FY25 EBIT guidance; Reinvests in trucks, hybrids, affordable EVs, battery storage
TUES 12-16
(DE) GERMANY DEC PRELIMINARY MANUFACTURING PMI: 47.7 V 48.7E (below all analyst estimates and lowest since Feb 2025) (42nd month of contraction)
(DE) GERMANY DEC ZEW CURRENT SITUATION SURVEY: -81.0 V -80.0E
(EU) Follow-up: EU set to propose softening emissions rules for new cars, scrapping an effective 2035 ban on combustion engines – press
(RU) RUSSIA DEP FOREIGN MIN RYABKOV: CERTAIN UKRAINE WAR RESOLUTION IS NEAR
(US) NOV UNEMPLOYMENT RATE: 4.6% V 4.5%E (over 4-year high)
(US) OCT ADVANCE RETAIL SALES M/M: 0.0% V 0.1%E; RETAIL SALES (EX-AUTO) M/M: 0.4% V 0.2%E
(US) NOV AVERAGE HOURLY EARNINGS M/M: 0.1% V 0.3%E; Y/Y: 3.5% V 3.6%E
(US) DEC PRELIMINARY S&P MANUFACTURING PMI: 51.8 V 52.1E (5th month of expansion but lowest since July); Manufacturing new orders fell for the first time in a year: Firms reported passing on the sharpest rise in costs for just over three years
(US) Fed's Goolsbee (hawkish dissenter, non-voter in 2026): Jobs market cooling at a "modest pace" - comments on CNN
AAPL Reportedly plans to expand iPhone lineup to seven models by fall of 2027; Up from the five currently in production - The Information
LEN Reports Q4 $2.03 ex-items v $2.23e, Rev $9.37B v $9.13Be; Margins under pressure due to 14% in incentives and price adjustments
ORCL Oracle 5-year CDS spread tested 151bps (now highest since 2009)
PFE Guides initial FY26 $2.80-3.00 v $3.08e, Rev $59.5-62.5B v $61.8Be; Cuts mid-point FY25 Rev $62.0B v $63.0Be (prior $61-64B); Affirms FY25 $3.00-3.15 v $3.13e
WEDS 12-17
(CN) Chinese researchers reportedly completed a working EUV prototype in early 2025; Targeting 2028 for working chips – sources
(DE) GERMANY DEC IFO BUSINESS CLIMATE: 87.6 V 88.2E
(JP) Japan govt panelist economist Toshihiro Nagahama: BOJ monetary policy appears to be influenced heavily by FX moves
(NZ) NEW ZEALAND Q3 GDP Q/Q: 1.1% V 0.9%E; ; Y/Y: 1.3% V 1.3%E
(UK) NOV CPI M/M: -0.2% V 0.0%E; Y/Y: 3.2% V 3.5%E (lowest annual pace since March and 1st negative M/M print since Jan)
(US) Fed's Waller (voter): Rates still 50-100bps above neutral; Prevailing view has come around to my view that labor market is very soft; Close to zero job growth
GOOGL Said to be working with Meta to expand support for AI chips; TorchTPU project aims to increase TPU compatibility on AI program-building tool Pytorch as an alternative to Nvidia – press
HUT.CA Signs $7B 15-Year, 245 MW AI Data Center Lease at River Bend Campus with Total Contract Value of $7.0B
NUE Guides Q4 $1.65-1.75 v $2.07e; Notes results driven by seasonal effects and fewer shipping days
OPENAI.IPO *Follow Up: Said to be in talks to raise funds at valuation of $750B; could raise up to $100B in the latest round - The Information
ORCL Oracle’s $10B Michigan data center in limbo after Blue Owl funding talks stall - FT (update)
WBD Confirms Board of Directors Unanimously Recommends Shareholders Reject Paramount Tender Offer; Determined that PSKY's tender offer remains inferior to the Netflix merger; Sees No Material Difference in Regulatory Risk Between PSKY Offer and Netflix Merger; Files 14D9 filing
THRS 12-18
(JP) BANK OF JAPAN (BOJ) RAISES POLICY RATE BY 25BPS TO 0.75%; AS EXPECTED
(JP) BOJ GOV UEDA: DELAYING RATE HIKE COULD FORCE A SIGNIFICANT HIKE LATER; CAN'T DENY RISK OF GOING ABOVE NEUTRAL RATE
(DE) Germany Debt Agency (DFA) on 2026 issuance: Plans to raise record €512B in debt: with €318B from capital markets and €176B in money markets (analysts estimated would 'likely exceed €500B')
(EU) ECB Chief Lagarde: Economic activity has been resilient - Prepared Remarks
(FR) French Pres Macron: EU-Mercosur deal can't be signed; Will find technical solution to back Ukraine funding
(UR) Ukraine Pres Zelenskiy: Not ready to withdraw troops from Donbas; Ukraine team will be in US on Dec 19-20th
(UK) BANK OF ENGLAND (BOE) CUTS BANK RATE BY 25BPS TO 3.75%; AS EXPECTED
(UK) BOE DEC MINUTES: VOTED 5-4 ON TODAY'S DECISION TO CUT RATES (Bailey, Breeden, Dhingra, Ramsden and Taylor voted for cut)
(US) DEC PHILADELPHIA FED BUSINESS OUTLOOK: -10.2 V 2.3E
(US) INITIAL JOBLESS CLAIMS: 224K V 225KE; CONTINUING CLAIMS: 1.897M V 1.92ME
(US) NOV CPI Y/Y: 2.7% V 3.1%E (slowest pace since July)
(US) PJM Interconnection reported fresh record-high capacityprices of $333.44/MW-day in its auction on Dec 17th; PJM noted that without the collar, clearing prices would have been $529.80/MW-day for the RTO and $542.83/MW-day for DOM, yet even at those levels, the reserve margin would only hit 15.4% - press (update)
ACN Reports Q1 $3.94 v $3.74e, Rev $18.7B v $18.6Be
FDX Reports Q2 $4.82 v $4.07e, Rev $23.5B v $22.9Be; Narrow FY guidance toward high end
KMX Reports Q3 $0.43 v $0.32e, Rev $5.79B v $5.73Be
LLY Orforglipron helped people maintain weight loss after switching from injectable incretins to oral GLP-1 therapy in first-of-its-kind Phase 3 trial; Achieved primary and all key secondary endpoints for weight maintenance vs. placebo at 52 weeks following weight loss on Wegovy or Zepbound
NKE Reports Q2 $0.53 v $0.37e, Rev $12.4B v $12.1Be; China sales remain weak
NKE Guides Q3 Rev 'down low single digits', gross margin -175 to -225 bps; Notes gross margin would be expanding ex-tariff effects - earnings call
ORCL TikTok signs agreements to sell US TikTok to JV controlled by American investors; Oracle, Silver Lake and Abu Dhabi's MGX will collectively own 45% of TikTok's US entity
FRI 12-19
(US) Pres Trump: I do not rule out war with Venezuela - NBC News
(US) White House President Trump: Tariff threat forced drug companies to reach a deal on pricing
(US) Trump: I'm going to call a meeting of insurance companies in Florida or DC; Insurance companies have gotten rich and need to get their prices down
(US) USTR Greer: Tariff plan is in good shape; If countries do not comply with deals, maybe we will talk more
(US) Fed's Waller (voter) reportedly had a 'strong interview' for Fed chair with Trump; The positive description of the Waller interview by officials was not necessarily an indication that he was a favorite candidate for the job – CNBC
(US) Fed's Williams (voter): Nov CPI was a bit encouraging; Dec CPI reading will be a better signal; Recent data has NOT changed by outlook; Don't have sense of urgency to act further now
(US) DEC FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 52.9 V 53.5E; 1-year inflation expectations 4.2% v 4.1% prelim
(US) NOV EXISTING HOME SALES: 4.13M V 4.15ME (highest in 9 months)
(EU) EURO ZONE DEC ADVANCE CONSUMER CONFIDENCE: -14.6 V -14.0E
MAERSKB.DK *Statement: This morning a Maersk vessel completed a transit through the Bab el-Mandeb Strait and into the Red Sea (first time in nearly two years)
CCL Reports Q4 $0.34 v $0.25e, Rev $6.33B v $6.36Be; Last three months achieved record booking volumes for 2026 and 2027 sailings; Reinstates quarterly dividend at $0.15 (indicated yield 2.1%)
LW Reports Q2 $0.69 v $0.67e, Rev $1.62B v $1.59Be; Price/mix -8%; Raised dividend 3%