Highlights
United States
U.S. equity markets posted gains during the shortened holiday trading week, with both the S&P 500 and the Dow Jones Industrial Average reaching new all-time highs. Trading activity and news flow were relatively subdued, but encouraging economic indicators and continued enthusiasm around artificial intelligence helped sustain investor optimism. According to preliminary figures released by the Bureau of Economic Analysis, the U.S. economy grew at its fastest pace in two years during the third quarter.
Gross domestic product expanded at an annualized rate of 4.3% in the period ending September, exceeding the second quarter’s 3.8% growth and surpassing expectations of roughly 3%. Increased consumer spending played a key role in driving this acceleration. U.S. consumer sentiment continued to weaken in December, according to the Conference Board. Its Consumer Confidence Index fell to 89.1, down from a revised 92.9 in November and below market expectations. Most components of the index declined, and consumers’ assessment of current business conditions turned negative for the first time since September 2024. Worries about employment prospects and household income growth weighed heavily on confidence.
Precious Metals
Precious metals delivered strong performance during the week, with both gold and silver recording notable price increases and adding to the gains they have already achieved this year. Gold prices have soared more than 65% in this year alone while silver prices have gained a remarkable 150% for the year. Both metals have also been supported by a weaker U.S. dollar at times during the year, which makes commodities priced in dollars more attractive to international buyers. In addition, persistent inflation concerns and central bank gold purchases—especially by emerging market central banks—have reinforced the positive momentum in precious metals.
Europe
In Europe, the pan European STOXX 600 gained 0.20%, supported by optimism around corporate earnings and economic prospects for the coming year. Germany’s central bank projected a gradual economic recovery beginning in 2026 after several years of contraction. While growth is expected to remain subdued initially, it is forecast to strengthen later, aided by increased government spending and a rebound in exports. In the UK, business surveys offered conflicting signals. The Confederation of British Industry reported that firms remain pessimistic and expect economic activity to weaken further. By contrast, Lloyds Bank’s business barometer showed improved optimism, with sentiment rebounding to its highest level in several months.
Asia
Meanwhile in Asia, the Nikkei 225 rose 1,243.18 points, or 2.51%, to end at 50,750.39 on Friday, rebounding from three muted sessions and translating to a second straight weekly, amid strength in several heavyweight blue chips. Inflation data from the Tokyo region showed a slower pace of price increases than expected, but central bank officials reaffirmed their readiness to raise interest rates if inflation and wage growth remain on track. Mainland Chinese stock markets also ended the week higher, with both the CSI 300 and Shanghai Composite recording solid gains.
Data highlights:
US GDP Growth Rate QoQ (Q3) came through higher than expected, at 4.3%, whilst the market had directionally miscalculated a 50bp drop to 3.3% from 3.8%. Both figures for the Canadian MoM GDP for October & November were released on Tuesday and the October figures fell, in line with expectations estimating a 50bp decrease to -0.3% from 0.2%. The November figures rose 40bp above its latest October release, from -0.3% to +0.1%, the market had only estimated a 10bp increase to -0.2%. The Japan Unemployment Rate for November remained steady on the 2.6% mark, as expected.
Week ahead:
Germany Inflation Rate YoY (Dec) – Tuesday | Swiss Inflation Rate YoY (Dec), EU Unemployment Rate (Nov) – Thursday | China Inflation Rate YoY (Dec), China PPI YoY (Dec), Swiss Unemployment Rate YoY (Dec), Canada Unemployment Rate (Dec) – Friday
