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The Year-End Moves No One’s Watching
Markets don’t wait — and year-end waits even less.
In the final stretch, money rotates, funds window-dress, tax-loss selling meets bottom-fishing, and “Santa Rally” chatter turns into real tape. Most people notice after the move.
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1) Market Update & Analysis
This Weeks Market Results:
S&P 500: +0.1%
Nasdaq Composite: +0.6%
Dow Jones Industrial Average: +1.3%
Russell 2000 (small caps): +0.35%.6%
What drove the market moves:
Rate-cut expectations stayed front-and-center after inflation data reinforced the “Fed likely on hold / easing later” narrative, even as trading stayed choppy.
Sector rotation was notable: Defensive stocks such as the consumer staples, real estate, and utilities sectors were steady this week. The financial sector lagged due top policy headlines about credit-card rate caps, adding uncertainty.
Semiconductors helped stabilize the market’s perception. AI-demand optimism is keeping the momentum strong among computer chip stocks.
Top 3 performing S&P 500 stocks of Year
Sandisk Corporation $SNDK ( ▲ 1.07% ): 74.24%
Shares are up as investors bet that demand for storage and memory will grow alongside AI and data-center expansion, which boosts expectations for future sales and profits.
Moderna $MRNA ( ▲ 6.28% ): 41.84%
The stock has rallied as the market prices in improving outlook for Moderna’s pipeline and revenue stability beyond COVID, helped by renewed optimism around upcoming product catalysts.
Lam Research $LRCX ( ▲ 2.52% ): 30.25%
Lam is rising as investors expect semiconductor manufacturers to keep spending on equipment to support advanced chips and AI-related capacity, which directly benefits Lam’s orders.
2) Finance News
1) Inflation data kept the “later in 2026 easing” thesis alive
The latest inflation information showed disinflation (a slowdown in the rate increase). This solidified expectations that the Fed can wait to cut interest rate.
Why it matters: Keep an eye on short-term interest rates and whether they keep rising or falling. If rates ease, it usually helps investments that depend on future growth (like many tech and growth stocks). But if the economy stays strong, money can still rotate quickly between sectors—so leadership may keep shifting even if the overall market is fine.
2) Earnings season kickoff + chips stayed in leadership
Company earnings season is starting: What matters most isn’t just last quarter’s results—it’s what companies say about what’s coming next. Pay attention to hints about costs, hiring, and whether they can keep raising prices without losing customers. Meanwhile, chip stocks have stayed strong because investors still believe demand tied to AI is growing.
Why it matters: Chip stocks doing well can help push the overall market up, but it’s healthier if more sectors join the rally instead of the market relying on just one group.
3) Policy headlines hit consumer finance (and potentially bank sentiment)
Markets flagged concerns around a proposed cap on credit-card interest rates, and related uncertainty weighed on parts of financials.
Why it matters: consumer-credit policy risk can affect financial sector earnings expectations and spill into consumer discretionary sentiment. Companies that provide discretionary products could benefit if credit policy turns positive for consumers.
4) Personal Finance Highlights
Mortgage rates: the average 30-year rate was reported around a three-year low (~6.06%), but affordability remains strained (down payments, home prices).
Builders are responding: a meaningful share of builders reported price cuts, signaling demand sensitivity and potential negotiation leverage for buyers (location-dependent).
Credit cards: any momentum toward APR caps is worth monitoring—could help borrowers if implemented, but could also tighten credit access or shift fees/terms.
3) Economic Update
What happened this week (and why it mattered)
Inflation data: helped reinforce the idea that policy can stay restrictive-but-steady without needing to re-tighten.
Housing signal: homebuilder sentiment weakened again, highlighting affordability pressure even as financing costs eased.
Expected impact
Softening housing sentiment can cool housing-related cyclicals and supports the view that parts of the economy remain rate-sensitive.
If inflation stays cooperative, markets may keep rewarding quality growth + long-duration while still rotating into “value/cyclicals” selectively when data surprises to the upside.
What’s coming next week (Jan 19–23) & why it matters
Markets closed Monday (MLK Day) in the U.S.
Watch the next slate of U.S. macro economic data releases and Fed speakers. These can shift rate expectations quickly in a low-liquidity, post-holiday week.
Global macro: the International Monetary Fund’s updated outlook is due, useful as a cross-check on global growth resilience amid trade/tariff uncertainty.
4) Policy Watch
Consumer credit policy risk: talk of a credit-card APR cap introduces headline risk for issuers and could ripple through consumer credit availability/pricing.
Housing policy intervention: reported actions aimed at improving affordability (including direction involving housing finance channels) coincided with a notable drop in mortgage rates. Investor angle: impacts homebuilders, mortgage REITs, and housing-sensitive consumer categories.
Trade/tariff backdrop: International Monetary Fund commentary emphasized resilience so far, but highlighted that escalating trade tensions remain a risk factor.
5) Chart of The Week
10 Year Treasury Yield Hits Highest Mark Since August
The recent rise in the 10-year Treasury yield is less about what the Fed is doing today and more about what investors think the economy and inflation will look like over the next decade and how much reward they want for holding long-term government debt. When growth comes in stronger than expected and inflation looks like it could stay “sticky,” investors demand a higher yield because they don’t want to lock in long-term rates that may prove to be too low.
On top of that, the U.S. is issuing a lot of debt to finance deficits, which increases the supply of Treasuries (bonds) they have to issue. More supply means lower prices, pushing yields higher. Worries about central-bank independence have added another layer. If investors think the Fed could face pressure that leads less credible policy, they’ll demand higher long-term yields as protection.
For investors, higher 10-year yields are significant because they impact almost every part of our economy. Mortgage rates and other borrowing costs tend to follow the 10-year yield. It even impacts valuations for growth stocks. Valuations if the prices of bonds drop, the signal of a potentially weakening economy would cause investors to doubt the future viability of the market and the future purchasing power of our investing dollars.
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