Stocks steady into year-end as Fed minutes and higher yields keep risk balanced
Today’s Market Mood, Key Events, Market Moving News.
📈 Market Mood:
⚪ Neutral – Equities are mixed while yields edge higher and investors await Fed clarity.
🗓 Key Events:
19:00 London / 14:00 New York – FOMC Meeting Minutes – Provides insight into Fed thinking on rates and inflation.
🌐 Market Moving News:
Stocks poised for a strong year-end, while gold and silver stabilize after a sharp pullback.
Oil prices little changed as investors seek clarity on Russia-Ukraine talks.
Asset Snapshots:
⚪ S&P 500: Neutral – Prices are flat with gains capped by rising yields.
⚪ USD (DXY): Neutral – Dollar is steady ahead of Fed minutes.
⚪ Gold: Neutral – Prices rebound modestly after profit-taking from record highs.
⚪ Oil: Neutral – Oil holds recent gains amid geopolitical uncertainty.
⚪ Bitcoin: Neutral – Bitcoin trades sideways with limited momentum.
Non-US Indices:
⚪ Nikkei: Neutral – Japanese equities are stable with no strong directional driver.
🔴 DAX: Bearish – German equities lag amid weaker macro momentum signals.
⚪ HK50: Neutral – Hong Kong stocks gain support from China IPO activity but remain volatile.
Volatility S&P 500 Index (VIX): 14.19 – Volatility is rising slightly, signaling mild caution but no stress.
Fed Watch (Jan 2026): Markets price an 83.9% chance of a hold at 3.50-3.75%, with 16.1% expecting a cut.
Credit Markets: LQD and HYG are both higher, suggesting stable credit conditions and supportive risk sentiment for equities.
Bond Curve: The 2Y, 5Y, and 10Y yields all moved higher, indicating firm rate expectations and a cautious macro tone.
FX Flows: USD/CNH moved lower while EUR/USD was flat, pointing to easing China-related stress and balanced risk appetite.
Macro Bias:
Shows overall bullish, bearish, or neutral trends across major markets based on key economic data. It reflects how indicators like GDP, inflation, employment, retail sales, and PMIs are performing. When data improves, the bias turns bullish; when it weakens, bearish; when mixed, neutral.
Indices:
🟢 S&P 500: Bullish
🟢 Nasdaq 100: Bullish
Currencies:
🟢 USD: Bullish
🔴 EUR: Bearish
🔴 JPY: Bearish
⚪ GBP: Neutral
⚪ AUD: Neutral
🔴 CAD: Bearish
Commodities:
⚪ Gold: Neutral
⚪ Oil: Neutral
Crypto:
🟢 Bitcoin: Bullish
🪙 Price Action Notes:
Watch equity reaction to FOMC minutes for direction into year-end.
Rising yields may cap upside in risk assets in the short term.
Precious metals remain sensitive to yield and dollar moves.
Disclaimer:
This newsletter is for information only and not financial advice. Markets carry risk, and past performance does not guarantee future results. Always do your own research or consult a qualified advisor before making investment decisions.
The HYG strength is worth noting here. When high yield credit is rising alongside equity gains, it usually signals that risk appetite is solid and not just concentrated in tech/growth names. I've noticed LQD and HYG divergences can be early warning signs when they start to break down, so seeing both higher together is constructive for the near term. The VIX at 14.19 aligns with this too, basically saying the market isn't pricing much tail risk despite yields edging higher. Curious how tomorow's FOMC minutes shift things if they sound more hawkish than expected.