The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
That’s a wrap.
Today was another quiet one and the bears got another win. The downside was small but a quiet environment favors the bears lately. Treasury yields climbed again, which might have assisted the equity bears during the session. Fed cut probabilities fell a little bit too. The 25-bip cut in January is now priced at 15%. Capital flow today was very light at 63%.
Let’s briefly discuss today. Quiet has been the ally of the bulls all year long. In December, specifically since Christmas, that reversed. We printed new all-time highs on the open of Dec 26th and have leaked value since. It hasn’t been a lot, about 100 points, but it’s been obvious. Does this show us that investor psychology has actually shifted? Has the default behavior for investors moved away from buying?
I don’t believe so but I’m confused by the price action. I’m wondering if there’s a takeaway hidden in this light-volume trading. Anyway….
2025 is official.
The equity bulls had another great year. Here’s the S&P 500 price performance over the last three years.
The narrative is that we’re in the middle of a bull market. The performance supports the story. If we have 2-4 more years of bull market to look forward to, who’s not going to hop on board now?
Here’s the Treasury yield curve
Nice yield drops along the curve except for the 30-year. That long-dated part of the curve is bothering a lot of people.
Let’s see what 2026 brings. There’s nothing right around the corner making markets nervous. That’s usually a good thing.
Happy New Year! See you Friday.
-Mike
Visdom Market Commentary
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