General Market News

U.S. short-term funding markets experienced typical year-end pressures this week, but the Federal Reserve's intervention through Treasury purchases and record usage of its Standing Repo Facility prevented a severe liquidity squeeze. The Fed's repo facility saw record borrowing of $74.6 billion as banks sought cheaper funding, while repo rates rose to 3.77% before easing, remaining well-controlled compared to past year-end periods.

• Banks borrowed a record $74.6 billion through the Fed's Standing Repo Facility at 3.75%, below market rates of 3.9%, demonstrating the Fed's safety valve is working effectively
• SOFR repo rates climbed to a two-week high of 3.77% on Monday before easing to 3.71%, reflecting tighter but manageable liquidity conditions
• Market participants noted significantly reduced year-end funding stress compared to expectations a month ago, with no major dislocations in funding-driven markets

Moody's Analytics chief economist Mark Zandi forecasts the Federal Reserve will cut interest rates three times in the first half of 2026, a more aggressive pace than current market and Fed expectations. His prediction is based on anticipated labor market weakness, inflation uncertainty, and potential political pressure from the Trump administration.

• Markets currently price in only two rate cuts for all of 2026, with the Fed's own projections showing just one cut for the entire year
• Zandi cites weak job growth and rising unemployment as key drivers, expecting businesses to remain cautious on hiring due to uncertainty over trade and immigration policies
• Political pressure could intensify as Trump reshapes the Fed's leadership, with three governor positions potentially changing hands and the Fed chair's term expiring in May 2026

Vietnamese ride-hailing company GSM, which operates under the brand Xahn SM and is part of the Vingroup holding company, is planning a Hong Kong IPO valued between $2-3 billion. The all-electric taxi service uses vehicles exclusively from sister company VinFast, and the IPO could provide crucial capital support for both companies as VinFast faces ongoing liquidity challenges.

• GSM aims to raise at least $200 million from the IPO, potentially reducing its dependence on intercompany loans from Vingroup founder Pham Nhat Vuong
• The IPO would create financial synergies: GSM gets a reliable EV supplier while VinFast gains a steady customer for its vehicles amid struggling global EV markets
• Asian ride-hailing competitors show mixed performance - Grab stock down 14% while U.S. peers Uber and Lyft gained 35% and 50% respectively this year

Global mergers and acquisitions activity rebounded strongly in 2025, with US deal volume reaching $2.3 trillion (up 49%) and global values rising over 25%, driven by Federal Reserve rate cuts, AI demand, and improved economic stability. Major transactions spanning media, technology, and mining sectors included Netflix's $82.7 billion acquisition of Warner Bros. Discovery's streaming assets and the $85 billion Union Pacific-Norfolk Southern railroad merger.

• Fed rate cuts lowered borrowing costs by 200+ basis points, enabling 63 deals above $10 billion globally as leverage capacity and valuations improved
• Netflix's acquisition of Warner Bros. Discovery studios/streaming creates a content production giant, while Anglo-Teck merger forms $53 billion copper powerhouse targeting 70%+ production exposure
• Google's $32 billion Wiz acquisition marks Alphabet's largest deal ever, strengthening cloud security offerings amid enterprise competition

US stocks opened lower on the final trading day of 2025, with all three major indices down approximately 0.2%, despite strong annual gains. The S&P 500 is set to finish up 17% for the year, the Nasdaq up 21%, and the Dow up 13%, marking three consecutive years of double-digit gains for the S&P 500.

• Markets recovered strongly from April's near-bear market when the S&P 500 fell 19% from its February peak following Trump's tariff announcements
• AI stocks drove divergent performance with Alphabet surging 65% while Amazon lagged, as the traditional 'Santa Claus rally' failed to materialize
• Initial jobless claims dropped to 199,000, the lowest in weeks, signaling continued labor market stability despite cooling hiring momentum

Wall Street recorded a historic 68 mega-deals exceeding $10 billion in 2025, marking the strongest M&A year since the pandemic as companies rushed to capitalize on a friendlier regulatory environment under President Trump. The surge in blockbuster deals pushed global average deal size to nearly $227 million, with dealmakers expecting momentum to continue into 2026 across multiple industries.

• Major deals included Netflix's $72 billion acquisition of Warner Bros. Discovery assets, Union Pacific's $72 billion Norfolk Southern merger, and Electronic Arts' $55 billion go-private transaction
• Corporate boards are acting with newfound urgency, fearing they'll miss opportunities if they hesitate - with dealmaking continuing even through traditionally slow periods like Thanksgiving
• Emerging trends for 2026 include increased crypto-related acquisitions, more corporate spinoffs, and growing participation from Middle Eastern sovereign wealth funds

Financial firms borrowed a record $74.6 billion from the Federal Reserve Bank of New York's Standing Repo Facility on December 31, 2024, marking the highest usage since the facility's inception. This year-end borrowing surge, which exceeded the previous record of $50.35 billion from October 31, reflects typical end-of-year liquidity pressures as lenders pull back for various regulatory and operational reasons.

• The $74.6 billion borrowed was collateralized with $31.5 billion in Treasury bonds and $43.1 billion in mortgage-backed securities
• The Fed has been actively encouraging eligible firms to use the facility after initial hesitancy, with officials noting that 'sizeable participation' is appropriate when economically justified
• Market participants expect the borrowing surge to be temporary and dissipate in the coming days as normal trading conditions resume

US initial jobless claims dropped to 199,000 for the week ending December 27, marking the lowest level in recent weeks and surprising economists. This unexpected decline suggests employers remain reluctant to cut staff despite economic uncertainties, though the resilience contrasts with other indicators showing a cooling labor market.

• Claims fell from 215,000 to 199,000, well below the 220,000 threshold economists associate with stable employment conditions
• The disconnect between low layoffs and weak hiring is evident, with November payrolls adding only 64,000 jobs while unemployment rose to 4.6%
• Year-end seasonal volatility complicates data interpretation, with the 4-week moving average rising modestly to 218,750

Major U.S. stock indexes are heading into the final trading day of 2025 on a losing streak, though they're still set to post double-digit gains for a third consecutive year. Key market concerns include Fed officials' inflation worries potentially limiting future rate cuts, and precious metals tumbling after margin requirement increases.

• S&P 500 up 17%, Dow up 14%, and Nasdaq up 21% year-to-date despite recent weakness, marking three straight years of double-digit gains
• Fed minutes reveal officials are divided on rate cuts, with some seeing inflation risks while others worry about job market weakness
• Gold futures fell 1.4% to $4,325/oz and silver plunged over 8% to $71.30/oz after CME raised margin requirements for the second time this week

President Trump has narrowed his Federal Reserve Chair picks to four candidates and plans to announce his decision by January, ahead of Jerome Powell's term expiration in May 2026. The leading contenders include Kevin Hassett and Kevin Warsh, with BlackRock's Rick Rieder and current Fed Governor Christopher Waller also under consideration.

• Trump continues attacking current Fed Chair Powell, calling him 'too late' on rate cuts and 'a fool' while threatening to sue over budget overruns on Fed headquarters renovations
• BlackRock's Rick Rieder oversees $3.2 trillion in fixed income assets and called potential consideration for the role 'the greatest honor of my life'
• Fed Governor Christopher Waller was among early dissenters pushing for rate cuts in July, signaling internal division within the central bank

The top five Dow Jones Industrial Average stocks for 2025 generated returns exceeding 35%, with Caterpillar leading at 59% followed by Goldman Sachs (54%), Johnson & Johnson (44%), Nvidia (40%), and IBM (37%). While tech giants Nvidia and IBM benefited from the AI boom as expected, Caterpillar's surprising performance was driven by soaring generator sales to AI data centers, and Johnson & Johnson gained from strong earnings and pipeline advances.

• Caterpillar's power generation division expects 5-7% annual growth through 2030 due to massive data center demand for generators, up from 4% average between 2019-2024
• Johnson & Johnson posted $23.99 billion in quarterly revenue with $2.80 EPS and completed a $3.05 billion acquisition of cancer therapy developer Halda Therapeutics
• Goldman Sachs capitalized on market volatility following Trump's universal tariff announcement, generating huge trading fees with earnings growth averaging 49% over four quarters

Wall Street futures point modestly lower (0.2%) as markets prepare for the final trading session of 2025, with Federal Reserve meeting minutes revealing policymakers view rate cuts as potentially distant. Investors remain cautious after three consecutive losing days, with holiday-thinned volumes expected to create choppy trading on New Year's Eve.

• Fed minutes showed December rate decision was a 'close call' with several officials suggesting it could be 'some time' before further cuts, reinforcing slower policy easing expectations
• Markets pricing in 85% probability the Fed holds rates steady at January meeting, with weekly jobless claims data at 8:30 ET as the only significant economic release
• Year-end positioning and light trading volumes dominate as earnings season remains weeks away with no scheduled Fed speakers

CNBC's Morning Squawk newsletter recaps five defining themes of 2025: the stock market's continued surge despite volatility, Trump's controversial tariff policies, the AI race driving massive corporate investments, Federal Reserve independence under pressure from Trump, and a K-shaped economy showing stark consumer divergence.

• Major indexes posted third straight positive year with S&P 500 up 13.7%, Nasdaq up 17.3%, and Bitcoin surging 166.5% despite tariff fears and AI spending concerns
• Trump's broad tariff plans sparked business scrambles to import goods early while the Supreme Court deliberates their legality, raising inflation and consumer cost concerns
• Fed cut rates three times to 3.5%-3.75% range amid Trump's pressure campaign, including his unprecedented firing of Fed Governor Lisa Cook pending court challenge

Schaeffer's Research analyzed four-week straddle returns for stocks in 2025, finding Western Digital (WDC) as the top performer among tech-dominated winners. The study reveals which stocks provided the most profitable options plays by measuring straddle performance across various metrics including average returns, win rates, and frequency of doubling investor money.

• Western Digital (WDC) topped multiple categories, leading in average straddle returns and most consistent positive outcomes, with other tech giants Oracle (ORCL), AMD, and Micron (MU) following closely
• Options trading volume hit another record in 2025, with the analysis focusing on stocks with sufficient liquidity and weekly expiration dates available throughout the year
• Seagate (STX) led the category for straddles that doubled investors' money most frequently, highlighting the potential for significant gains in technology sector options

SpaceX and OpenAI are emerging as the most anticipated IPO candidates for 2026, with SpaceX potentially valued at $1.5 trillion and OpenAI seeking $100 billion in funding at an $830 billion valuation. Both companies lead their respective industries in commercial space and artificial intelligence, making them pivotal opportunities for investors in what could be a landmark year for public offerings.

• SpaceX generates billions in revenue as the leading space-launch provider, with its Starlink unit becoming a major global satellite internet provider
• OpenAI is seeking $100 billion in funding to scale AI efforts amid competition from Anthropic, which projects $70 billion revenue by 2028
• Over 200 companies went public in 2025, setting the stage for 2026 to be another significant year for the equities market

The Champagne industry faces reputational damage after migrant grape pickers died during 2023's 'harvest of shame,' exposing exploitation and human trafficking in seasonal labor practices. These labor scandals compound existing challenges for the $35 billion luxury beverage sector, including declining global sales (down 4.9% in 2024) and potential U.S. tariffs threatening profitability.

• At least 4 migrant workers died during 2023's extreme heatwave, with 3 individuals later convicted of human trafficking for exploiting 50+ West African workers who reported being treated 'like slaves' in unsanitary conditions
• Industry employs 120,000 seasonal workers annually through widespread subcontracting that enabled abuses; Moët & Chandon invested €1.5M in worker housing improvements following scandal
• Champagne shipments fell to 271M bottles in 2024 (-4.9%), with U.S. tariffs and strikes at LVMH units over pay adding pressure to an industry representing 35% of global sparkling wine value

U.S. Treasury yields edged lower on Wednesday morning, with the 10-year yield dipping to 4.112%, as investors awaited weekly jobless claims data - the final economic release of 2025. The data is expected to provide additional insight into the Federal Reserve's monetary policy path following their divided December meeting that resulted in a rate cut.

• 10-year Treasury yield fell 1 basis point to 4.112% while 2-year yield dropped to 3.446% in early morning trading
• Weekly jobless claims data due at 8:30 a.m. ET marks the last economic data point of 2025 and could influence Fed rate cut expectations
• Fed's December meeting minutes revealed a divided committee on the recent rate cut decision, with traders slightly increasing bets for another cut in April

Major US stock indices closed lower on Tuesday in thin year-end holiday trading, with the S&P 500 down 0.14%, Nasdaq falling 0.24%, and Dow dropping 0.20%. Fed minutes revealed a deeply divided 9-3 vote on December's rate cut, marking the most dissents since 2019 as officials debate balancing labor market support against inflation concerns. Despite 2025's challenges including tariff fears and a 43-day government shutdown, all three indices are positioned for double-digit annual gains driven by strong earnings.

• The Fed's December rate cut vote of 9-3 exposed significant internal division, with some members suggesting rates should remain unchanged for an extended period after the latest reduction
• Wall Street strategists are split on 2026 outlook, with bulls citing AI, economic stimulus and earnings growth while bears warn about excessive optimism and predict a range-bound market
• Strong corporate earnings have been the primary driver sustaining the bull market through geopolitical turmoil, tariff concerns, and the historic government shutdown

Federal Reserve policymakers were deeply divided over December's 25 basis point rate cut, with two voting members dissenting in favor of holding rates steady and one dissenting for a larger 50 basis point cut. The meeting minutes reveal significant disagreement about the path forward for monetary policy as officials grapple with slowing job growth and inflation above the Fed's 2% target.

• Six officials released economic projections opposing a cut, while market expectations now show 85% probability of rates remaining unchanged at the January 27-28 meeting
• Policymakers are monitoring signs of a 'K-shaped' recovery with diverging economic conditions between high-income households showing stronger spending and low-income households becoming increasingly price sensitive
• Fed officials indicated they await key economic data including December inflation and jobs reports on January 9 and 13 following November's 43-day government shutdown that delayed reports

Federal judge Terry Hatter rejected Andrew Left's attempt to dismiss criminal fraud charges accusing the Citron Research founder of manipulating stock prices through misleading public statements. Left, who faces up to 25 years in prison, claimed he was selectively prosecuted for publishing bearish opinions, but the judge denied this defense without explanation.

• Authorities allege Left used social media and TV appearances to profit from quick price movements after his comments, collecting at least $16 million from manipulating stocks including American Airlines, Nvidia, and Tesla
• Left's lawyers argued the government was unconstitutionally targeting him based on the content of his speech as an activist short-seller who publishes negative market opinions
• Criminal trial scheduled for March 17, 2026, after judge previously rejected dismissal attempts in both the criminal case and a related SEC civil case