The Santa Claus rally is building. and are at new all-time highs.
The strong move up in equities on Friday continues this morning. The concerns about the AI narrative continue to ease, seen in the further moves up in and . earnings were the key to the turnaround. Micron shares are up about 21% since their earnings were announced on December 17th (+222% YTD), Nvidia is up 6.8% in the same period, helped by the announcement that they expect to renew shipping advanced chips to China by February.
In today’s move up, only utilities and consumer staples are in the red, with energy leading +1.1% (+3.0% YTD). Over the last five days, momentum and growth names are leading, with dividend names trailing as hopes for further Fed cuts soon remain weak. The VIX continues to fall, dropping below 14.5, near the lows for the year, down 35% from the late November highs.
On the commodity front, silver’s blistering run higher continues, reaching above $69.50 /oz, +37.8% in a month, +128% YTD. Gold is up to $4,463, +8.5% in a month, +69.4% YTD. There appears to be a physical shortfall of silver, and growing industrial use, while gold is being used as a safe alternative to currencies by central banks. has bounced up 2.2%, but is still down 0.5% in a month. is down 3.7%, dropping back to $3.80/mcf, down 6% in a week. Gasoline is flat, but up from its lows last week. Crypto is modestly higher with Bitcoin getting as high as $90.4K, +2.8% in a week.
Interest rates are drifting slightly higher, with the back to 3.5%, up 5 bps in a week. The exception is the , down slightly today to below 4.17%, also up 5bps in the last three trading days. Global yields continue to move higher, with the now above 2.08%, the highest in 30 years. The Japanese currency is also at a 30-year low value to the US dollar.
As the trading day continues, the major indexes are holding onto the early gains, with the the exception, as it continues to rise, now up 1.4% and is leading in the last month +6.2%, a sign of optimism about 2026. The even-weight S&P is outpacing the market weight, up 3.6% in the trailing month vs +2.4%.
The trend is our friend, 2026 looks to have a strong start, and a potential Santa Claus rally is back on the table, which would leave us ending the year at new highs, with the S&P now only 53 points away.