MARKET WRAP

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A gap higher to start the day failed equities spent most of the day in the red as year-end rotations continued to weigh on tech and the broader AI trade, while Financials, Industrials, and Consumer Staples benefited. On the Day: SPX -0.2%, QQQ -0.5% and IWM -0.8%

Elsewhere, it looked like early on yields could help the morning bounce in equities, but they reversed alongside equities with the US10YY only down a tick to 4.18%. Gold remained at all time highs. It may be time to start paying attention to oil, as it’s now hitting multi year lows, down another -1.5% today. The dollar was slightly lower. The VIX closed higher to 16.50 ahead of important macro data beginning tomorrow.

After Hours: Both SPY and QQQ are up a tick after hours

Today’s MRKT Call: Dan and Guy break down holiday trading and the VIX, strength in banks and weakness in parts of the AI trade. Carter joins to talk sector rotations, deep-value stocks showing some life, this year’s IPOs, year-end dynamics, early-January volatility, and what’s next for bitcoin.

Today’s RiskReversal Pod: Dan and Peter Boockvar sit down with Louis Vincent-Gave to unpack the U.S.-China economic rivalry, covering trade embargoes, China’s industrial response, global market implications, AI, state capitalism, and the shifting balance of economic power.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 gives up gain as AI-related stocks come under pressure again (CNBC)

• US Jobs Report Takes Center Stage: Here’s What You Need to Know (Bloomberg)

• Weak US Job Data Could Lift Stocks, Says Morgan Stanley’s Wilson (Bloomberg)

• AI infrastructure selloff continues on Wall Street as Broadcom, Oracle shares slide (CNBC)

• This old Wall Street investing theory suggests 2026 could see more rotation and upside (CNBC)

• BofA’s Savita Subramanian says the S&P 500 will rise to 7,100 in 2026, the most bearish forecast on the Street thus far (CNBC)

• S&P 500 CY 2025 Earnings Preview: Analysts Expect Earnings Growth of 12.1% (FactSet)

• Why Everyone Got Trump’s Tariffs Wrong (WSJ)

WHAT’S NEXT?

Today largely extended some of last week’s themes, with rotations out of tech and the broader AI trade. That capital doesn’t appear to be leaving the market altogether, though, as evidenced by an SPX that’s largely gone sideways the past few weeks— with Financials, Industrials, and Consumer Staples seeing more inflows today. The rotations themselves haven’t been perfectly clean day to day over the past week, but the one steady throughline has been ongoing outflows from names like Oracle, and more recently Broadcom.

Bitcoin was another weak spot, still unable to hold a bounce after the sharp drop from 125k. It’s now trading around 86k after multiple failed attempts to reclaim the 90k level over the past two weeks.

Treasury yields started the day with a modest pullback from Friday’s move higher but firmed as the session went on, leaving the US10YY around 4.18%. That’s worth watching as a heavy slate of economic data kicks off tomorrow with Non-Farm Payrolls, which will include not only November’s print but also some of the delayed October data. Volatility also continued to creep higher into the data, with the VIX rising to around 16.40 after hitting very depressed levels last week post FOMC.

This December is shaping up to be a bit unusual, with a dense run of macro data landing right ahead of the holiday weeks, and that could make things like implied volatility and trading volumes less predictable than the typical seasonal playbook. For tomorrow, short duration volatility is elevated versus last week, with an SPX expected move of about 0.7%:

• Tuesday, Dec 16th (consensus)

  • 8:30am - NFP Jobs Number (Nov 40k, 4.4%)

  • 8:30am - Retail Sales (Oct MoM 0.2%)

  • 9:45am - S&P Prelim PMIs

  • After-hours: LEN 5%

• SPX Expected Move: 0.7%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Bitcoin & AI Stocks Fall Under Pressure Again

Dan and Guy dig into holiday trading dynamics and where the VIX sits heading into it, along with the strength in banks and the continued weakness in parts of the AI trade like ORCL and CRWV. Carter joins to talk through recent rotations out of tech and into financials, industrials, and other areas, including a few stocks that are starting to wake up after years of dormancy and some true deep-value names. They also look back at notable IPOs from 2025, what’s on deck for 2026, Carter’s expectations for year-end trading and the potential for early-January volatility, and wrap with a look at bitcoin’s recent weakness and what might come next.

Analysis - VIX, SPX, XLF, ORCL, CRWV, JETS, KRE, IYT, XRT, WRBY, FIGS, LC, WU, UPS, RSP, SPY, BTC, AAPL, TSLA, MSTR, US10YY

Learn more about our sponsors, Fidelity and FactSet.

Watch RiskReversal Podcast’s newest episode: From Uninvestable to Unflappable: China’s Semi & AI Blitz Is Rewriting the Trade War

In this episode of the RiskReversal Podcast, host Dan Nathan and guest Peter Boockvar, CIO at One Point BFG Wealth Partners, speak with Louis Vincent-Gave, CEO and founder of ⁠Gavekal⁠, to discuss the evolving economic competition between the US and China. They explore the impact of past trade embargos, particularly the 2018 semiconductor embargo, and China’s response which led to significant industrial advancements. The conversation touches on the implications for global markets, US companies, and the strategic shifts in industrial policy. They also delve into the potential outcomes of continued US-China rivalry, including the growing importance of AI technology, state capitalism, and the future role of the US and China in global trade. The episode highlights the complexities and potential shifts in economic power dynamics and the strategic responses required on both sides.

Learn more about our sponsor CME Group and iConnections.

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