Weekly Market Update (Dec 14, 2025)

Market Hedwig
1 hour ago
2 min read

HIGHLIGHTS

S&P500 hit record high. Fed cut rate by 25bps this week. Markets expect a BoE cut, ECB hold and BoJ hike in the coming week.

Fed: Fed cut rates this week and signaled a pause in January, along with one cut in next year. Job market data indicated resilience in the market. For more clarity, markets are waiting for the reports next week, including employment, CPI and retail sales.

Gold: Gold rally slowed down as markets became cautious on the bets for further easing after the Fed meeting. The recent sell-off is not only for gold but appears broad-based across commodities markets.

Warner Bros: Paramount’s hostile offer has been approved. It has to cope with $54 billion of debt if it takes over Warner Bros. Lenders can raise costs to Paramount if the market deteriorates, plus higher expectations from credit raters, the merger could be more expensive than expected.

MARKETS

Nasdaq	23,195.17	-1.62%
S&P 500	6,827.41	-0.63%
Dow	48,458.05	+1.05%
10-Year	4.19%	+5bps
Brent	61.22	-3.42%
DXY	98.39	-0.61%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: December is usually a strong month for equities historically, with prices increasing concentrated in the second half of the month. Fundamentals are also supportive for the markets to move higher.

Morgan Stanley: We believe the small caps, high-beta, unprofitable and speculative stocks would be vulnerable in 2026. We suggest avoiding single-stock concentration and taking profit in those names.

Fixed Income

Morgan Stanley: Interest rate volatility has dropped and short-term rate cuts have been supporting the markets. Markets expect yield curve steepening will continue, with the sticky long-end yield. It benefits banks that can earn wider interest margins on loans, while not beneficial for long-duration assets such as real estate, infrastructure and housing.

Standard Chartered: We favor Emerging Markets (EM) bonds over Developed Markets (DM) bonds. Credit quality is better and they provide higher yields relative to DM bonds. It could also help to diversify via the FX component amid the weakening dollar trend.

Economy

UBS: We expect another cut in 26Q1 as the job market remains soft. Inflation is likely to peak in 26Q2 at about 3%. Fed emphasized that tariffs are the main cause of inflation overshoot, and it would just be a one-time price jump.

J.P. Morgan: Fiscal stimulus should be able to support spending in the first half of 2026. However, markets need to prepare for a pullback in the second half of the year. Increasing unemployment and slowing job creation indicate that wage growth should soften soon.

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.