Pre-Markets Lower on Low Seasonal Volume

Monday, December 29, 2025

Our major market indexes have flattened on low seasonal volume of late, and are slipping in early trading in the third-final trading day of 2025. The Dow is currently -52 points, the S&P 500 is -20, the Nasdaq -123 and the small-cap Russell 2000 is -5 points currently. Year-to-date, we’re up anywhere from +13% in the Russell 2000 to +21% in the Nasdaq. This looks to be the third-straight year the Nasdaq is trading at +20% or higher. Not too shabby.
 

Home Price Reports This Week

After today’s open, we’ll get the latest Pending Home Sales report, for the month of November. In terms of inflation metrics cooling, this one has got to be fairly encouraging: year over year, over the last two prints, we’ve fallen -0.9% in September and -0.4% in October. Month over month, we’re actually up three straight: +4.2% in August, +0.1% in September and +1.9% in October.

This report will be followed by a new Case-Shiller Home Price Index on Tuesday, which has reported three straight months lower on the 20-city survey: -0.3% in July, -0.6% in August and -0.5% in September. These reports haven’t been delayed by the government shutdown or anything; Case-Shiller numbers are really just that far in arrears all the time.
 

What to Expect from the Stock Market This Week

While Wednesday is New Year’s Eve, it’s still a full trading session on Wall Street. We’ll also see Weekly Jobless Claims numbers hit the tape ahead of the opening bell that day. For Initial Claims, we’ve seen a drop of -50K from early September to the most recent print last week, currently sitting at a very accommodating +214K. This would be in-line with a narrative of a very strong labor force.

For Continuing Claims, after two weeks lower than 1.8 million, we ratcheted back up over 1.9 million, where we had spent the previous six months (without ever broaching the psychologically significant 2 million longer-term jobless claims). Again, these are numbers consistent with a healthy labor market — something we’ve decidedly not seen in the monthly jobs reports from ADP ADP and the Bureau of Labor Statistics.

Tomorrow will see the release of the minutes from the latest Federal Open Market Committee (FOMC) meeting from earlier this month, when it was decided another 25 basis points (bps) would come off the Fed funds rate, to a current range of 3.50-3.75% for the first time in more than three years. There were three dissents at this meeting: Fed Presidents Schmid (Kansas City) and Goolsbee (Chicago) voted for no change; Fed Governor Miran once again voted for a -50 bps cut.

Thursday, markets are closed in observance of New Year’s Day, ushering in 2026, for which the first trading day will be this Friday. However, we continue to expect low trading volumes and perhaps modest risk-taking as we enter a new year of AI investment, tariff restrictions and a continually evolving global economic environment.

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