Macro update
US equities mixed:
The Nasdaq 100 edged higher, while the S&P 500 and Dow Jones slipped as losses in healthcare and energy outweighed gains elsewhere, leaving Wall Street directionless ahead of further data.
Sector pressure:
Energy stocks fell nearly 3% as oil slid to its lowest level since 2021, while healthcare declined after Pfizer cautioned on its 2026 outlook and Humana signalled management changes.
Jobs and data in focus:
November payrolls rebounded by 64,000, but unemployment rose to 4.6% and retail sales were flat, reinforcing the view that recent data remains distorted by the government shutdown.
Rate expectations diverge:
Markets are pricing more than 58 basis points of US rate cuts next year, well above the 25 basis points indicated by the Federal Reserve (Fed) last week, keeping policy uncertainty elevated.
Asia finds its footing:
Japan’s Nikkei 225 rebounded as technology stocks tracked Nasdaq gains, though caution persists ahead of a widely expected Bank of Japan (BoJ) rate hike and guidance on the pace of tightening in 2026.
UK inflation update:
UK headline inflation eased to 3.2% in November from 3.6%, reducing pressure on the Bank of England (BoE) and strengthening expectations of an interest-rate cut this week.
S&P 500 drops further still
The S&P 500 keeps sliding from last week’s 6,903 high but found interim support along the 55-day simple moving average (SMA) at 6,760. While it holds, a recovery towards the 6,900 region may unfold.
A fall through 6,760 may take the index back towards the 6,700 area, though.
Short-term outlook: bearish while below the 11 December 6,903 high
Medium-term outlook: neutral while above 6,522 November low but below its 6,920 October peak