Weekend Update, December 22nd, 2025
Here Comes Santa Claus
Index, Sector, and Asset Performance
Santa showed on cue last week. December tends to be a strong positive return month, but the positive return is generally all back ended loaded. The second half of December stands out as the strongest half-month of the year and most of the gains come after the 15th trading day in December, which was last Friday. Here’s the intramonth return chart from Market Gauge and Seeking Alpha.
Monthly S&P 500 seasonality profile:
The S&P 500 ended Fridays at 6,834, down -0.2% for the month but up +16% for the year. Consumer discretionary, led by Tesla, was the strongest sector in the S&P 500 this week, rising +1%, followed by gains of +0.6% in materials and health care. Technology and communication services also edged up on a rebound in the AI trade.
On the downside, energy fell -2.9%, followed by a -1.4% loss in real estate and a -0.9% drop in consumer staples. Industrials, utilities, and financials also edged lower. These sectors were hurt by higher long-term Treasury yields.
Per Goldman Sachs 1-Week asset returns:
The shorter-end U.S. 2-year Treasury yield moved up 1 basis point to 3.49%, while the U.S.10-year Treasury yield rose 1 basis point to 4.16%.
Economic Indicators and Earnings Commentary
The November CPI report indicated that core CPI fell to 2.63% from 3.02% in September.
The Philly Fed Index dropped to -10.2 from -1.7 this week and the Empire Index declined even more, to -3.9 from +18.7 a month ago.
The University of Michigan Consumer Sentiment Index fell to 52.9 from 53.3 a month ago with signs of affordability concerns, as 1-year inflation expectations ticked up by a tenth to 4.2%.
This week’s data includes: 3q GDP numbers, 3q Personal Consumption, Core PCE for 3q, Durable Goods orders, and Industrial Production.
Reported earnings have come in well ahead of consensus expectations in Q2 and Q3 of 2025.
For 2026, S&P 500 earnings and earnings growth looks to triangulate around $300-305/shr and 12% YTY growth for the year. Peak YTY growth looks to be in 4q26 nearing 17% YTY. Per Goldman Sachs, the 7 largest stocks in the S&P500 (NVDA, AAPL, MSFT, GOOGL, AMZN, AVGO, META) account for about 36% of S&P 500 market cap, 26% of current earnings (TSLA drags the number down) and should contribute over 45% of EPS growth in 2026.
Costco (COST) beat on both earnings and revenue but the stock is now trading at 52-week lows.
Broadcom (AVGO) suffered its worst earnings reaction ever after posting better than expected headline results.
Homebuilder Lennar (LEN), posted mixed results, declined -4.5% post-earnings reaction.
The earnings calendar this week is nonexistent.
Commodities and Currencies
Oil bounced on Venezuela geopolitical concerns.
Copper, gold, silver and other industrial metals have hit new ATHs. Precious metals like gold and silver continued their strong YTD performance with gold back over $4,400/oz. Crypto assets and bitcoin have been volatile since pulling back from their mid-summer $125k ATH.
The US dollar still sits near 99.
OHFG Stock Talk
2026 Market Outlook Part 1: Seasonality and Cycles
Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
