Economic Calendar: Key Market Movers (week of 22Dec25)
In the coming week, several countries will be observing Christmas. In the United States, there will be an early market closure beginning on 24 December to mark the occasion. Christmas Day, 25 December, will be celebrated in America, Singapore, and Hong Kong, with all three regions observing the holiday. Additionally, Hong Kong will remain closed for an extra day on 26 December in recognition of the extended holiday period.
On the other hand, China will not have any public holidays during this week and normal operations are expected to continue there.
Federal Reserve’s Preferred Inflation Measure: PCE
The Personal Consumption Expenditures (PCE) index, which is the Federal Reserve’s preferred gauge of inflation, is scheduled for release in the coming week. In October, the year-on-year PCE data stood at 2.8%. Should this figure trend higher in the next report, it could influence the Federal Reserve’s approach to reducing interest rates in the upcoming months.
Gross Domestic Product (GDP) for Q3
The third quarter GDP results are also set to be released, with forecasts currently at 3.2%. This data will be closely monitored as an indicator of overall economic health and growth momentum.
Durable Goods Orders
Durable goods orders for October previously posted a monthly increase of 0.5%. This figure serves as a valuable reference point for assessing American consumer spending and demand for long-lasting manufactured items.
CB Consumer Confidence Index
The Conference Board (CB) Consumer Confidence Index for December is forecasted at 91.7. This level suggests a contraction in consumer sentiment, which may have a subsequent impact on broader consumption patterns.
New Home Sales
Data on new home sales for September, October, and November will be released in the coming weeks, offering insight into trends in the real estate market.
Initial Jobless Claims
Additionally, initial jobless claims are forecasted at 220,000; any significant changes in this number could introduce volatility into the markets.
Crude Oil Inventories
The most recent crude oil inventory figures indicated a drawdown of 1.274 million barrels. This reduction suggests increased consumption and is generally considered bullish for the market in the short term.
Christmas festivities
From my family to yours, wishing all a blessed Christmas and a Happy New Year. Wishing all of us peace, health and success in the coming 2026.
Earnings Calendar (22Dec25)
With Christmas approaching, there will be fewer earnings in the coming week.
Without any personal earnings at stake, I will share how I quantify business.
How to conduct fundamental analysis
To qualify an investment business, I utilise a fundamental analysis approach that focuses on long-term performance and financial health. I typically review 10 years of data to evaluate how a company builds resilience and recovers during economic downturns.
Here is the framework I use to group and analyse key metrics:
1. Income Statement & Growth
I look for consistent upward trends in the following areas:
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Revenue & Net Profit: Steady growth in both. For startups, I look for a clear trend of reducing losses.
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Earnings Per Share (EPS): Evidence of growing shareholder value over time.
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Dividends: If the company pays dividends, I look for a consistent or increasing Dividend Per Share (DPS).
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Profitability Margins: I analyse both Gross and Net Profit Margins to ensure the business is operating efficiently.
2. Balance Sheet & Cash Flow
A healthy company must demonstrate stability through its internal finances:
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Balance Sheet: I look for increasing net assets, growing retained earnings, and well-managed liabilities.
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Cash Flow: The most critical indicators are Cash Flow from Operations and Free Cash Flow.
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Core Business Integrity: I am cautious if a company’s profits come primarily from secondary investments or non-core activities rather than its primary business operations.
3. Industry Benchmarking & Valuation
Numbers are most meaningful when compared to the broader market:
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Comparative Analysis: I compare a company’s performance against direct competitors (e.g., comparing FedEx with UPS or DHL) while accounting for specific service differences like integrated logistics.
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P/E Ratio: I use the Price-to-Earnings ratio to see how the company’s valuation stands against the industry average.
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Margin of Safety: Before investing, I calculate a target price that includes a “Margin of Safety” to protect against market volatility.
4. Qualitative Factors
Once the quantitative data is verified, I apply two final filters:
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Economic Moat: I assess the company’s competitive advantage—its “moat”—to determine if its market position is sustainable.
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Circle of Competence: I only invest in sectors I thoroughly understand. If a business falls outside my area of expertise, I prefer to stay away.
Hopefully, this checklist can be helpful in this investment journey. Wishing all great success in 2026. (Content is from me, image is generated by Gemini.)
Market Outlook of S&P500 (22Dec25)
Technical Analysis Overview
MACD Indicator
Following the recent top crossover, the Moving Average Convergence Divergence (MACD) indicator is now signalling a downtrend.
Moving Averages
The price action, as depicted by the candlesticks, is currently situated above both the 50-day and 200-day moving average (MA) lines. This positioning indicates a bullish trend in both the short-term and long-term outlooks. Furthermore, both the 50 MA and the 200 MA are trending upward, reinforcing the positive trend.
Exponential Moving Averages (EMAs)
The three Exponential Moving Averages (EMA) lines have recently converged and are showing a bullish outlook. This convergence and subsequent uptrend further support the case for continued bullish momentum in the market.
Chaikin Money Flow (CMF)
The Chaikin Money Flow (CMF) currently registers at 0.14 and is also trending upward. This reading indicates that there is more buying pressure than selling, which is typically interpreted as a positive signal for future price movement.
The current technical analysis for the S&P500 indicates a “Strong Buy” rating when assessed at the Daily interval. This suggests that market conditions are highly favourable for purchasing at this time.
Out of the total indicators evaluated, 17 have issued a “Buy” signal, reinforcing the positive outlook. In contrast, only 1 indicator has given a “Sell” signal. This imbalance highlights a broadly optimistic sentiment among the technical indicators.
CNN Fear & Greed Index
The CNN Fear & Greed Index has recently been trending upwards, moving away from a state of fear and progressing towards greed. This shift in sentiment suggests that market participants are becoming increasingly confident.
At present, the index stands at 45, which is classified as “neutral.” This represents a significant improvement compared to one month ago, when the index was in the “Extreme Fear” category with a score of just 7. The change demonstrates a notable recovery in investor sentiment over the past month.
Candlestick Analysis (done by Grok)
Short-term outlook: Mixed but leaning bullish, with recent high-reliability patterns like Three Outside Up (daily, Dec 11) signalling potential upside amid volatility and minor bearish signals like Engulfing Bearish (weekly).
Long-term outlook: Positive, dominated by bullish formations such as Morning Star and Three White Soldiers (monthly), supporting continued uptrend in S&P 500.
Given the above, I lean towards a bearish outlook in the short term.
News and my thoughts from the past week (22Dec25)
More than $61 billion has flowed into the data center market so far this year. Hyperscalers are increasingly turning to outside capital in the form of debt to fund the energy-intensive infrastructure. S&P Global expects demand to continue to grow next year, despite high valuations and funding concerns leaving investor worried about a bubble. - CNBC
JAPAN TO SELL $530 BILLION OF U.S. STOCKS TO STABILIZE THE ECONOMY. JGB 10-YEAR YIELD RISES TO 2%, HIGHEST LEVEL SINCE THE DOT-COM BUBBLE IN 1999. BEARISH NEWS FOR GLOBAL MARKETS. - X user OxNobler
Morgan Stanley declares the end of the US recession and eyes early-cycle gains in 2026 - The Edge Singapore
China now has a record 3.75 terawatts of power generation capacity. That capacity has doubled over the last 8 years. This is nearly 3 TIMES more than the US, which has ~1.30 terawatts of capacity. Furthermore, China has 34 nuclear reactors under construction, more than the next 9 countries combined. Nearly 200 other reactors are planned or proposed. At the same time, there are currently no large commercial nuclear reactors under construction in the US. The US must act now to keep up with China. - X user The Kobeissi Letter
Honda to temporarily shut down factories in China and Japan because of chip shortage — disruption caused by fallout from on-going conflict within Nexperia - Tom’s Hardware
EU will *borrow* €90 billion and give it as a *loan* to Ukraine, which was the poorest nation in Europe even before the war began. The only way for Ukraine to pay the debt in the future is to sell its assets - agricultural land, minerals etc. - X user SL Kanthan.
Nonbanks/NDFI are no longer in the shadow, they are the out in the open - unregulated, unsupervised and unhinged. U.S. banks have $1.2T of exposure to nonbanks. Nonbanks now represent 51% of global financial assets. - X user Unicus
“The non-bank financial sector's share of global assets grew to 51%, or $256.8 trillion, last year and expanded at double the rate of the traditional banking industry, the Financial Stability Board said on Tuesday. Non-bank financial intermediaries involved in what is commonly referred to as the "shadow banking" sector include money market funds, hedge funds, private credit providers, pension funds and insurers among others. The sector's rapid expansion is a growing priority for regulators, who worry about its lack of transparency and the risk problems there could endanger broader financial markets.” - Reuters
Imports to busiest US seaport tumble 11.5% in November as tariffs bite, port executive says - Reuters
Margin Debt as a % of M2 Money Supply jumps to highest level since the Global Financial Crisis - BarChart
Tom Lee, fresh off a new hair cut, out on CNBC says watch out for a potential 10-15% SPX drop in the first half of 2026.
Hedge fund holdings of sovereign debt are up to a record $7 trillion. The majority of holdings are currently US Treasuries, totaling $4.2 trillion, or ~60% of the total. Hedge funds' exposure to US public debt has TRIPLED since 2018. As federal debt surges, regulatory constraints have limited banks from expanding their holdings as fast as hedge funds. As a consequence, this has raised the risk of rapid-fire sales of government bonds during market crises, when hedge funds need to raise cash quickly, as seen 2008 and 2020. The financial system has never been more leveraged. - X user The Kobeissi Letter
Fed Chair Powell says. "We can raise and lower interest rates, but we don't really have the tools to address a secular housing shortage, structural housing shortage." - Stock Market News
Elon Musk: The fundamental weakness of Western civilization is the empathy exploit. “There's a guy who posts on the internet who's great, Gad Saad, and he talks about basically suicidal empathy. There's so much empathy that you actually suicide yourself. So we've got civilizational suicidal empathy going on. I believe in empathy. I think you should care about other people, but you need to have empathy for civilization as a whole and not commit to a civilizational suicide. The fundamental weakness of Western civilization is empathy. The empathy exploit. They're exploiting a bug in Western civilization, which is the empathy response. I think empathy is good, but you need to think it through and not just be programmed like a robot. Its weaponized empathy is the issue.” (Joe Rogan Podcast)
My Investing Muse (15Dec25)
Layoffs, Bankruptcy & Closure news
New Fortress Energy, a company that builds liquified natural gas terminals, is reportedly in big financial trouble. Bloomberg reports the company has missed interest payments on its loans and says it can’t repay large chunks of debt due soon. To avoid immediate collapse, lenders have agreed to temporarily hold off demanding their money until January 9, 2026.
Ford LAYOFFS: 1,600 people at a factory that barely opened. Why? Because EVs didn’t make money... and apparently AI data centers do. They spent $5.8B building the Kentucky EV battery plant. So now, 1,600 workers laid off, EV production cancelled, Plant converted to serve AI data centers & utilities, $19.5B EV profit hit - X user Amanda Goodall
Howard’s Appliances, a 79-year-old appliance retailer, has shuttered all of its remaining locations and filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California. - Mass Live
News about layoffs, closures and bankruptcies continues into the end of the year. There are always layoffs, closures and bankruptcies. However, these are approaching previous crisis levels. This does not mean that we WILL enter into a crisis but it is good to be prepared.
AI - a bubble?
These are some of the news items in the past week regarding AI. Do you think that it is a bubble?
AI is part of our present and future. AI is not a silver bullet. AI is a great assistant. Not everyone will survive. Will Microsoft take over OpenAI?
US electricity prices are at record highs. After your electric bills doubled, it’s will double again because you have to pay for AI data centers. In the next 10 years, AI power demand will QUADRUPLE. That’s 4.4% of ALL electricity on Earth. If AI data centers were a country, they’d rank 4th in electricity use behind only China, the US, and India. - X user Andrew Lokenauth
Reuters story on AI (another reality check) titled: “AI promised a revolution. Companies are still waiting” Lots of great anecdotal stories in here on GenAI implementation. Below is one of my favorites. Come on...a 100-page document of rules should be cut and dried... but it isn’t “But Cando ran into a surprising stumbling block: the models couldn’t consistently and correctly summarize the Canadian Rail Operating Rules, a roughly 100-page document that lays out the safety standards for the industry. Sometimes the models forgot or misinterpreted the rules; other times they invented them from whole cloth. AI researchers say models often struggle to recall what appears in the middle of a long document. Cando has dropped the project for now, but is testing other ideas.”
The entire AI bubble is propped up by a company that is on $13 billion revenue btw. They just tried to raise at 750 BILLION valuation. - X user Zoomer
Godfather of AI Warns of an AI Bubble. Geoffrey Hinton says the AI boom risks becoming a bubble, not because the tech fails, but because companies are ignoring the social shock from mass job losses. “These guys are really betting on AI replacing a lot of workers,” Hinton said. “I don’t think people are factored in enough, the massive social disruption that will cause.” With Big Tech set to spend hundreds of billions on AI, Hinton warns their models assume society can absorb unemployment without political backlash or a collapse in demand. “If you do get huge increases in productivity, that will be great for everybody if the wealth was shared around equally,” he said. “But it’s not going to be like that. It’s going to cause huge social disruption.” - X user Daniel Romero
My Final Thoughts
Is time in the market better than timing the market? So long we make money?
RAY DALIO WARNS: “Its not a recession which is going to hit US & the World but a total breakdown of the Monetary System” - CNBC “Meet the Press”
Inflation and CPI Data
Recent news reports have highlighted a “lowered” inflation rate based on the latest Consumer Price Index (CPI) data. However, it is important to note that this assessment may not be entirely accurate, as several item updates are missing from the CPI release. The incomplete data could result in a misleading representation of the true inflationary environment. Despite these concerns, market participants are optimistic about the possibility of a Santa Claus Rally in the coming weeks, and many are wondering if this trend will repeat in 2025.
Mixed Market Signals
As additional economic data emerges, the market is experiencing a combination of positive and less favourable news. Notably, the Bank of Japan (BoJ) has increased its interest rate, which raises ongoing concerns about the yen carry trade. Meanwhile, precious metals such as gold and silver have reached new highs, reflecting increased investor interest in safe-haven assets. In contrast, Bitcoin has faced challenges in recovering its previous highs, particularly the $100,000 mark.
Approach to Current Market Conditions
Given the current uncertainty and the mixed signals from various sectors, exercising caution remains a prudent approach during this period. The interplay of economic indicators, central bank actions, and asset price movements suggests that vigilance is necessary when making investment decisions in the present climate.
Financial Strategy and Outlook
Let us spend within our means, invest only what we can afford to lose, and avoid leverage. Let us review our current holdings with the intention of divesting from businesses that are losing their competitive advantages. Additionally, I will consider adding both hedging strategies and defensive positions to our portfolio to mitigate risk.
As we move forward, it is crucial to conduct thorough due diligence before assuming any new responsibilities.
Wishing everyone a successful week ahead.
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