This week should be relatively calm. The most notable data release will be Report on Friday January 3. Early in the week we’ll get housing data, while continued jobless claims on Jan. 2 will likely draw attention. Claims last week reached 1.91 million, although those figures are often revised downward. If claims rise unexpectedly, that could signal a potential labor market slowdown, but the broader data suggests continued strength.
THE December Jobs Report The BLS won’t arrive until Jan. 10, making this week’s ISM data, expected at 48.2, down slightly from 48.4, one of the few key indicators for now.
Stocks and Market Performance
Last Friday, stock markets opened sharply lower, but managed a slight rebound at the close. There was a notable bounce late in the day, gaining around 30-40 basis points over the last 15 minutes, driven by a $2 billion buying imbalance. Despite this, the breadth of the market was small: only 48 stocks rose, while 452 fell and three remained unchanged.
Major contributors to the losses included tech giants like Nvidia (NASDAQ:), Tesla (NASDAQ:), Microsoft (NASDAQ:), Apple (NASDAQ:), and Amazon (NASDAQ:). THE Bloomberg500 The index reflected this weakness, highlighting the tough day for stocks.
S&P 500 Futures and Funding Trends
A notable trend has been the sharp decline in BTIC total return futures for March 2025. These contracts, which are used to measure equity financing costs, fell from a high of 179.5 to just 71 as of Friday’s close. Historically, these contracts trade in tighter ranges, suggesting this year’s move is more extreme.
This could indicate year-end deleveraging or reduced demand for margin and leverage. If this trend persists, it could reflect broader market dynamics, such as tighter liquidity or adjustments in dealer balance sheets. We will have more clarity when FINRA Margin Balance Data comes out in mid-January.
Interest rate and yield curve
The yield reached its highest level since November 2023, closing at 4.82%. Unlike at the end of 2023, when…
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