Morning in New York: neutral backdrop fuels Santa Claus rally

Daily review and forecast of events on the US stock market by Mikhail Denislavov, Deputy Director of Freedom Capital Markets Research.

This Monday, data on pending home sales for November will be released (consensus: +1.8% after +1.9% for the previous reporting period). This leading indicator will allow us to measure current demand for real estate, but it is unlikely to have a significant impact on the dynamics of upcoming trades. No significant corporate earnings reports are scheduled for today.

Technical support for stocks may come from seasonal factors: historically, the so-called Santa Claus rally develops in the last days of the year.

The external backdrop remains mixed. Markets are likely to react positively to news that Presidents Donald Trump and Vladimir Zelensky have agreed on security guarantees during talks on resolving the Russian-Ukrainian conflict. Concerns may arise over the start of Chinese military exercises near Taiwan.

Silver is the focus of attention on commodity markets, having reached $80 per ounce amid a shortage of physical metal, followed by a correction.

Futures on US indices are showing moderately negative dynamics. We assess the balance of risks for the upcoming trading session as neutral with low volatility. We expect the S&P 500 to fluctuate within the range of 6900–6960 points (from -0.4% to +0.4% relative to the previous session's closing level).

— Coupang (CPNG) announced that it will allocate approximately $1.17 billion to compensate customers affected by the recent data breach with shopping vouchers. The company had previously successfully completed its investigation into the incident, which was deemed minor, and recovered the stolen information. This prompted a positive reaction in CPNG's share price on December 26, with a 6.5% increase. In pre-market trading on December 29, the shares rose another 2.5%.

—Amazon (AMZN) is winding down its drone delivery program in Italy due to a challenging commercial and regulatory environment that hinders the project's long-term goals, despite technical successes.

— According to the Washington Post, the number of corporate bankruptcies is growing at its fastest pace since 2011. Management cites inflation, high interest rates, and foreign trade policy as the main reasons.

Trading on December 26 on US stock exchanges was low and ended with a slight decline. The S&P 500 fell 0.03%, the Nasdaq 100 lost 0.05%, the Dow Jones corrected 0.04%, and the Russell 2000 fell 0.54%.

The stocks of the "Magnificent Seven" showed mixed dynamics. Nvidia (NVDA: +1.02%) provided tech giants with a reliable positive driver, while Tesla (TSLA: -2.1%) was under pressure. The materials sector (XLB: +0.59%) led the growth, boosted by the rally in commodity markets. Cyclical consumer goods manufacturers (XLY: -0.44%) were among the outsiders.

The absence of important macroeconomic statistics also contributed to trading within a narrow range. Investors' focus shifted to commodity markets. Gold hit new all-time highs (+1.1%), silver soared 7.7%, and copper rose 4.7%, which supported mining company stocks. WTI crude oil fell 2.8%.

Beijing has imposed symbolic sanctions against a number of US defense companies, but the news has had little impact on broader market sentiment, which remains near historic highs amid expectations of a "soft landing" for the economy.

— The Financial Times has learned of pressure on Target (TGT: +3.1%) from activist investor Toms Capital Investment Management, although the publication does not disclose exact details about the size of the fund's stake.

— The New York Post reports that Warner Bros. Discovery (WBD: -1.4%) management is willing to discuss a deal with the Allison family, provided that Paramount Skydance raises its bid price.

This article was AI-translated and verified by a human editor