The S&P 500 Index ($SPX) (SPY) today is up by +0.39%, the Dow Jones Industrials Index ($DOWI) (DIA) is up by +0.27%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.50%.  December E-mini S&P futures (ESZ25) are up +0.40%, and December E-mini Nasdaq futures (NQZ25) are up +0.47%.

Stock indexes are climbing today, recovering some of last Friday’s sharp losses.  The outlook for lower interest rates and easier Fed policy is supporting stocks, with the 10-year T-note yield down -3 bp to 4.16%.  Also, this week’s US economic news on employment and prices is expected to be Fed-friendly and supportive for stocks. 

Dovish comments today from Fed Governor Stephen Miran were supportive for stocks, as he said the Fed's policy stance is unnecessarily restrictive for the economy, citing a benign inflation outlook and warning signs in the labor market.

Today’s economic news was dovish for Fed policy and bullish for stocks.  The US Dec Empire manufacturing survey of general business conditions unexpectedly contracted -22.6 points to -3.9, weaker than expectations of 10.0.

Weaker-than-expected Chinese economic news is negative for global growth prospects.  China's Nov industrial production unexpectedly eased to +4.8% y/y from +4.9% y/y in Oct, versus expectations of an increase to +5.0% y/y.  Also, China's Nov retail sales rose +1.3% y/y, weaker than expectations of +2.9% y/y and the smallest pace of increase in 2.75 years. In addition, China's new home prices fell 0.39% m/m, marking the 30th consecutive month of declines.

This week's market focus will be on US economic news.  Later today, the Dec NAHB housing market index is expected to increase by +1 to 39.  On Tuesday, Nov nonfarm payrolls are expected to increase by +50,000, and the Nov unemployment rate is expected to be at 4.5%.  Meanwhile, Nov average hourly earnings are expected to rise by +0.3% m/m and +3.6% y/y.  Also, on Tuesday, Oct retail sales are expected to be up +0.1% m/m, and Oct retail sales ex-autos are expected to be up +0.2% m/m.  Finally, on Tuesday, the Dec S&P manufacturing PMI is expected to decline by -0.2 to 52.0.  On Thursday, weekly initial unemployment claims are expected to fall -11,000 to 225,000. Also, Nov CPI is expected to be +3.1% y/y, and Nov core CPI is expected to be +3.0% y/y.  On Friday, Nov existing home sales are expected to be up +1.2% m/m to 4.15 million.  Also, the University of Michigan Dec consumer sentiment index is expected to be revised upward by +0.2 to 53.5 from the previously reported 53.3.

The markets are discounting a 27% chance that the FOMC will cut the fed funds target range by 25 bp at the next FOMC meeting on January 27-28.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is up +0.71%.  China’s Shanghai Composite closed down -0.55%.  Japan’s Nikkei Stock 225 closed down -1.31%.

Interest Rates

March 10-year T-notes (ZNH6) today are up by +7 ticks.  The 10-year T-note yield is down -2.0 bp to 4.165%.  T-notes are climbing today after the Dec Empire manufacturing survey of general business conditions unexpectedly contracted, a dovish factor for Fed policy. T-notes also have support from dovish comments by Fed Governor Stephen Miran, who said the Fed's policy stance is unnecessarily restrictive for the economy.   Strength in stocks today is limiting the upside in T-note prices.

The steepening yield curve is bearish for T-note prices.  Steepening trades occur when bond investors buy short-term government debt and sell long -term debt.  The yield curve has steepened since last Wednesday’s FOMC meeting, when the Fed said it would begin purchasing up to $40 billion of short-term T-bills a month, starting today, to boost liquidity in the financial system. Longer-term Treasury securities are also under pressure from concerns about inflation and the Fed’s independence. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -1.7 bp to 2.840%. The 10-year UK gilt yield is down -2.2 bp to 4.494%.

Eurozone Oct industrial production rose +0.8% m/m, right on expectations and the biggest increase in 5 months.

Swaps are discounting a 0% chance for a -25 bp rate cut by the ECB at its next policy meeting on Thursday.

US Stock Movers

KLA Corp (KLAC) is up more than +4% to lead chip makers higher after Jeffries upgraded the stock to buy from hold with a price target of $1,500.  Also, Micron Technology (MU) and Lam Research (LRCX) are up more than +2%.  In addition, Applied Materials (AMAT), Advanced Micro Devices (AMD), NXP Semiconductors NV (NXPI), Nvidia (NVDA), and ASML Holding NV (ASML) are up more than +1%.

Mining stocks are moving higher today, with gold and copper up more than +1% and silver up more than +3%.  As a result,  Barrick Mining (B) and Newmont (NEM) are up more than +1%.  Also, Hecla Mining (HL) and Freeport-McMoRan (FCX) are up more than +1%.

Immunome (IMNM) is up more than +23% after announcing positive results from a Phase 3 trial of its Varegacestat in patients with desmoid tumors. 

ZIM Integrated Shipping Services (ZIM) is up more than +5% after Calcalist reported that MSC has submitted a bid to purchase the company. 

Akam Technologies (AKAM) is up more than +4% after KeyBanc Capital Markets double-upgraded the stock to overweight from underweight with a price target of $115.

Teradyne (TER) is up more than +3% after Goldman Sachs double-upgraded the stock to buy from sell with a price target of $230. 

Corebridge Financial (CRBG) is up more than +3% after S&P Dow Jones Indices said the stock will replace Allete Inc in the S&P MidCap 400 effective before the open of trading on Wednesday, December 17. 

Doximity (DOCS) is up by more than +2% after Morgan Stanley upgraded the stock to overweight from equal weight, with a price target of $65. 

Charles River Laboratories (CRL) is up more than +2% after JPMorgan Chase raised its price target on the stock to $190 from $165.    

ServiceNow (NOW) is down more than -9% to lead losers in the S&P 500 after KeyBanc Capital Markets downgraded the stock to underweight from sector weight with a price target of $775.

ARM Holdings Plc (ARM) is down more than -3% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $120.

Entegris Inc. (ENTG) is down more than -2% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $75.

LyondellBasell Industries NV (LYB) is down more than -1% after BMO Capital Markets downgraded the stock to underperform from market perform with a price target of $36/

Adobe (ADBE) is down more than -1% after KeyBanc Capital Markets downgraded the stock to underweight from sector weight with a price target of $310.

Texas Instruments (TXN) is down more than -1% after Goldman Sachs double-downgraded the stock to sell from buy with a price target of $156.

Earnings Reports(12/15/2025)

Dakota Gold Corp (DC), Lifezone Metals Ltd (LZM), Lionsgate Studios Corp (LION), Triller Group Inc (ILLR). 

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