New York morning: shortened trading on Christmas Eve will go quietly

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

On Christmas Eve, the main session on the US stock exchanges will end three hours earlier than usual and will be held against a neutral news background. The focus of attention of participants of pre-holiday trading will be weekly data on the number of applications for unemployment benefits. The consensus assumes that the number of initial applications, as a week earlier, will be 224 thousand, and repeated applications - will increase from 1.897 million to 1.9 million. Preservation of stable situation, probably, will not change the guidelines for further actions of the Fed and will not cause a pronounced reaction in the market.

The auction of seven-year Treasury bonds will take place today. The quality of demand will determine the short-term trajectory of the yield curve. However, the baseline scenario assumes robust demand and limited yield reaction, which reduces the risk of an increase in the discount rate for equities.

Futures on US indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming trades as neutral with low volatility. We focus on the S&P 500 fluctuations in the range of 6880-6940 points (from -0.4% to +0.4% to the closing level of the previous session).

- Ramaco Resources (METC) securities rose 7% amid the announcement of a two-year share repurchase program of up to $100 million, which will be funded without affecting capital projects.

- Organogenesis Holdings (ORGO) quotations saw increased volatility caused by the announcement of the start of a step-by-step filing (BLA) with the U.S. Food and Drug Administration (FDA) for ReNu for the treatment of osteoarthritis of the knee. If approved, it could become the first non-surgical therapy of its class on the US market.

- Shares of UiPath (PATH) are up about 7% on news of its inclusion in the S&P MidCap 400. Inclusion in the stock index traditionally has a positive effect on issuers, increasing their visibility for investors.

Trading on December 23 on American stock exchanges ended mostly in the plus. S&P 500 added 0.46%, updating the historical maximum at the close, NASDAQ 100 rose by 0.5%, Dow Jones rose by 0.16%, and only the Russell 2000 corrected by 0.69%. Technology giants were the most sought-after stocks, leading to a divergence between the capitalization-weighted S&P 500 and its equilibrium counterpart (RSP ETF: -0.23%). The energy sector (XLE: +0.66%) led the way. Non-cyclical consumer staples (XLP: -0.48%) were the outsiders. Shares of the "Magnificent Seven" moved mostly upward, with NVIDIA (NVDA: +3%) making the most notable contribution to the positive dynamics.

The block of macroeconomic statistics released the day before revealed an ambiguous situation. On the one hand, the preliminary estimate of GDP for the third quarter recorded its growth by 4.3% in annualized terms, which significantly exceeded the consensus of 3.3%. The components of consumer spending showed strong positive dynamics (actual: +3.5% year-on-year, consensus: +2.7%). A significant contribution to the overall result was made by net exports (+8.8% y/y) with imports falling by 5.1%. However, as we have already noted, the value of this report for Fed rate outlook revisions was diminished by the delayed release due to the US government shutdown.

On the other hand, durable goods orders data for October fell 2.2% with a consensus of -1.5%. The December consumer confidence index, which was forecasted at 91 points, fell to 89.1 points. A significant component of this index - the labor market differential - narrowed, which also signals deterioration of the situation.

The combination of strong but delayed GDP data and weak, more relevant indicators led to the consensus for a Fed rate cut through the end of 2026 being revised down more than 10 basis points, to about 41 basis points.

A positive signal for the technology sector was the decision of the US authorities to postpone the introduction of import tariffs on semiconductors from China until the summer of 2027.

- Sable Offshore (SOC: +36.3%) has received regulatory approval to restart the Las Flores Pipeline system, which has been idle since 2015, giving the company access to previously locked capacity.

- ServiceNow (NOW: -1.5%) confirmed its deal to buy Armis for $7.75 billion.

- Asana (ASAN: -6%) Chief Operating Officer Ann Raimondi disclosed the sale of more than 160,000 shares of the company.

- Viking Therapeutics (VKTX: +2.9%) was supported by news of approval for Novo Nordisk's (NVO: +7.3%) oral weight loss drug.

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